After 3 years of offering substandard camera features on the iPhone, Apple has announced that the new model will be upping the megapixel count from a 3-megapixel camera to 5-megapixels and adding HD video to boot.

The new version of the iPhone will include two cameras, one for the front and one for the rear.

The camera application will come with a tap to zoom feature, an LED flash for lighting the photo in poor conditions, although not Xenon, and a 5x digital zoom. 

“Megapixels are nice, but what cellphone cameras are really about is capturing photons and low-light photography," said Steve Jobs at his keynote to kick off WWDC in San Francisco. "So we’ve gone from a 3 to a 5 megapixel sensor with a backside illuminated sensor. It’s a way of getting more light to the sensor." 

The news brings it in line with many of today's smartphones from HTC, but still behind many of the phones from Samsung, Motorola, and LG.

As for the video quality on the new iPhone 4, it records 720p at 30 frames per second as well as offering you the chance to focus video by tapping on the screen. Users will also be able to use the LED flash on the back to light the footage. 

But wait, there's more, as a gameshow presenter would say. 

Apple has also confirmed that the new iPhone 4 will also get an optional in-video editing functionality via a new app called iMovie for iPhone. Costing $4.99 it will be an incredibly pared down version of the Mac application and let users add transitions and titles on the device and then upload it to YouTube or Mobile Me as well as export the movie in 360p, 540p or 720p.

It will be able to add geo-location data to the video. Apple has not confirmed whether or not the app will be available on the previous iPhone 3GS or the iPad. 

Read all our iPhone 4 coverage here.