Apple’s official specs on the iPhone 4 state that it can run H.264 video up to 720p at 30 frames per second, Main Profile level 3.1 with AAC-LC audio up to 160Kbps, 48kHz, stereo audio in .m4v, .mp4 and .mov file formats. However if you remember back a few months it was shown that the 3GS could playback 720p/1080i video, although it was not officially supported, see related for the link. So this has made me think that due to the bump in CPU power, now that the iPhone is running Apple’s A4 chip that it should be able to playback full 1080p video.
With the extended battery and retina display, I can imagine that watching HD video on the iPhone 4 will be stunning but I can understand why Apple doesn’t include it official as it does save battery life playing 720p instead of full 1080p.
Also if you plug your iPhone 4 into your TV it would be a useful device to watch HD movies without the need for BluRay.
iPhone 3GS Capable Of HD (720p/1080i) Video
In April it was rumoured that the iPhone 3GS would be able to play 720p and 1080i HD video via the Apple AV Cables. When the device was finally released it was found that the video still played like its predecessors only supporting SD 2.5Mbps MPEG 4 or H264 video. But this turned out to a set limit by Apple, possibly to save the battery life of the device or to keep the old iPhone videos working on the new 3GS model.
A user of the Chinese website WeiPhone did a lot of testing with the iPhone 3GS and they discovered that it can in fact smoothly play HD video at 30Mbps at a 1080i (1980×1080) resolution. This was achieved by uploading various HD movies to the iPhone 3GS using the program FileAid and then running them via the iPhones built-in video player.
Playing back HD video on a iPhone is very useful on the small screen and the battery usage would drain a lot quicker. However is you used Apple’s Component AV Cables and it would be possible to run HD video from the iPhone.