You are assuming that the orientation of the CCD matches the orientation of the phone. I'm betting that they had to turn it 90 degrees to wedge it in.
Regardless, the return value may not be what you expect, but it isn't wrong. When the phone is held vertically, the bits from the camera image are all rotated to the right, and orientation is set as right. Any rotation of the phone will return the proper bits and orientation in the image.
UIImageVIews take this orientation into account when drawing, so again, everything is consistent.
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