upgrading to 11.1 on iphone 4s

I am trying to sync my iphone 4s with itunes on my Max for the first time! An error message pops up on my Mac that states I need to upgrade my itunes to 11.1. I can't seem to find any updates available on my iphone nor can I find any way to upgrade it. What am I doing wrong???

I have upgraded ios 7.0.3. Not sure if this makes a difference.

Thanks!