Apple Inc yesterday unveiled the first major upgrade to its iPhone operating system in nine months at its Cupertino, California headquarters, introducing software that allows the smart phone to perform many functions that other high-end phones already can – particularly the long-missing 'cut and paste' option.

Apple said the new operating system, the third for the iPhone, will be available in the summer, and will boast 100 new features. The operating system is expected to be used in the next version of the iPhone, suggesting a new model might be released around that time.

The company also rolled out new development tools for companies building and selling iPhone programmes, and a revamped App Store, which sells iPhone downloads.

Apart from cut and paste capability, other new features include the ability to attach voice recordings, photos or contact files to emails; and a search function, dubbed "Spotlight," for scouring the phone's contents. The new iPhone can also be used to provide an Internet connection for notebook computers and other devices.

Senior vice-president Scott Forstall said Apple was late in delivering the technology. "We had to rebuild the software to do it," he said. "Here it finally is."

The operating system upgrade, the third for the iPhone, will be available from the summer and free to all iPhone users. However, users who want to download the 3.0 software onto their iPod Touch will have to pay a fee of $9.95.

Apple said its iPhone App Store, which sells iPhone software, will soon let developers sell subscription-based software products. This would allow, for instance, a game maker to sell updated scenarios or an e-book reader to include a library of books.

Among the major changes is the addition of "push" technology, which solves a major issue concerning the iPhone's instant-messaging and other applications that need to run when the iPhone is turned off. The new system involves automatically updating software programmes once the phone is turned back on, as well as letting the software retrieve updates automatically when running.

The new iPhone operating system also now supports peer-to-peer connections, which lets users easily swap files with each other. It also has stereo Bluetooth.

Apple said it was giving third-party accessory makers and developers even greater control over the iPhone's functions. Meanwhile, accessories now being built allow control of the iPhone from the accessory itself. For example, one pair of third-party headphones can find the iPhone wirelessly and one manufacturer is making a blood-pressure cuff that works with the phone.

It said that the success of its App Store, where users can download from a choice of 25,000 paid-for and free applications, had exceeded their expectations, with users having downloaded 800 million programmes. It also said it was selling roughly 25,000 titles on the mobile platform.

Apple had a 10.7-per cent share of the worldwide smart phone market at the end of 2008 after nearly doubling its market share from a year ago, according to a CNNMoney report quoting research firm Gartner Inc. Ahead of Apple were top smart phone seller Nokia Inc - whose 40.8 per cent share is more than double that of Research in Motion, the second-placed manufacturer.