There are plenty of iOS apps for making music. They range from metronomes to virtual instruments to auto-tune apps. But soon we’ll actually start to see apps for serious music production thanks to support for MIDI control which is baked into the upcoming iOS 4.2.
Basically the new version of Apple’s mobile operating system will allow you to either use an iPad Camera Connection kit to form a USB MIDI connection or a WiFi connection.
This will effectively let you run MIDI capable software on your mobile device, connect to a MIDI instrument, and use your iPhone or iPad as a digital music controller, recorder, or other tool.
Create Digital Music has more details, plus a rundown of hardware and software tools that let you use MIDI with an iOS device with or without IOS 4.2.