New features include a front-facing video camera for mobile chats, a camera flash and higher resolution back-camera, a second microphone for noise cancellation, and an improved display on the phone that will stretch to 960 pixels, which is almost double the screen resolution of the current iPhone 3GS. The case is thinner with an aluminum border and the back of the device is completely flat with a material made either of glass or "shiny plastic" to improve reception.
The person who found the phone -- supposedly on the floor of a Redwood City bar inside of an iPhone 3G case -- said it was running iPhone OS 4.0 but Apple "remotely killed" it. The device cannot be restored because each firmware is device specific, and there are no publicly available firmware versions for Apple's next-generation iPhone yet.
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