It often fixes software bugs in the phone.

It fixes bugs and sometimes even adds features.  e.g. earlier versions
of the old Nokia 5190 didn't have the ability to add a personal ring
tone and early 5190s did not have T9 predictive text but later
firmware included T9 predictive text  capability.  Later firmware
versions had personal ring tone and T9.

Besides some bug fixes the later version of firmware for the 6310i
added five more spots to use for personal ring tones.

More often it's to fix bugs, but it does add features sometimes.
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