To all!
I faced the same thing when i updated my iTunes to v12.1.1
In my opinion, Apple has recognized that this is a bug and keeping quiet until they resolve it.
Here's my story:
I've recently bought an iPhone 6 (128) and was going to transfer all my data from iPhone 4s (64) which is almost maxed out to my new iP6.
I did a back up of my iP4s using iTunes v12.0.1.26 and went well overnight.
Just when i'm about to restore these (iP4s data) to my new iP6. I did an honest mistake which is, i've decided to update my iTunes to v12.1.1 first (**** those pop ups as i always thought the newer version should be better) prior to transferring my old data to my new iP6.
When my iTunes was updated, that's when it started not detecting both of my iP's in iTunes.
This is INSANE Apple! you shouldn't release a patch in Public without a thorough testing on integration with iTunes etc. Please fix this ASAP cuz it kills the thrill and excitement of purchasing your latest product line of iPhone! so much hype for the slogan "wish we could say more". Put these issues aside, iPhone is still a **** good and long lasting products.
Here's what i did to make it work:
I have uninstalled my new updated iTunes including of all the the other stuffs that was updated (this can be found via control panel and sort it by date to identify which apple product was updated) and uninstall all of them.
After my PC removed all the previous version of iTunes. I did reset my computer
Lucky me, i still keep the previous installers of iTunes i have downloaded dated back to 11th December 2014 which is v12.0.1.26. I did installed back the iTunes installer <--
Now it is working fine and my iTunes can detect both of my iP4s and iP6.
all is left to do is transfer all the stuffs i had in iP4s and move them all in my iP6 inclusive of messages, email, settings, contacts (via cloud) etc.
I hope i don't face anymore surprises so i can enjoy the new gadget i've bought!
Clash on and Happy Clashing LOL