Apple Inc unveiled an iPhone software upgrade with new features ranging from copy-and-paste and message notifications to picture messaging, as the company pursued further growth in a hotly contested cellphone market.

While Apple's touchscreen interface had inspired many imitators, some users had complained it lacked functions common in other smartphones such as multimedia messaging and the ability to copy and paste text.

Such features already exist on rival devices like the BlackBerry from Research In Motion and Treo from Palm Inc. The iPhone is central to Apple's plans, as growth in its Mac computer and iPod music player businesses slows.

On Tuesday, Apple -- led by iPhone software senior vice president Scott Forstall with Chief Executive Steve Jobs out on medical leave -- lifted the veil on many wished-for functions and features.

The company said an early version of the software would be available to developers today, with consumer availability this summer.

Its 3.0 operating system for the iPhone would support automatic alerts of items such as sports results or the arrival of an instant message. The alerts would show up automatically even if the user is in another application.

Analysts said that while most the of updates were long expected, improvements to the developers kit could help increase revenue made from applications.


Apple promised multimedia messaging capability with the new system, allowing users to send each other photographs from the phone. And it announced a peer-to-peer capability that allows users near each other to interact with their iPhones for features such as gaming.

On top of that, the company unveiled a widely anticipated universal search feature called spotlight, which can search key applications on the phone such as e-mail and iPod.

Apple, which sells iPhones in 80 countries, said consumers had already downloaded 800 million iPhone applications from its store, which offers 25,000 applications so far. In January, Apple had said that more than 500 million applications had been downloaded and that more than 15,000 were available.

It said it will expand its App Store to 77 countries from 62.

Apple did not comment when asked about plans to release a netbook computer or a new iPhone model. Many analysts expect to see a new iPhone this summer, while some speculate Apple will also introduce a stripped-down version for as little as $99.

Apple's second-generation, 3G iPhone was an immediate hit when it was released last July. The company sold a total of 13.7 million iPhones in 2008, topping its 10 million target.

The iPhone App Store has become something of a consumer phenomenon, helping boost interest in the device, since it was launched last summer. The store features a wide array of applications, some for free and some for a fee.

What they did with this blew us away, Forstall told the audience, referring to the applications developers.

Apple shares were up 4.4 percent to $99.66 in late afternoon trading on Tuesday, extending strong gains in the morning ahead of the news and outperforming slightly the Nasdaq's 4.1 percent rally as large technology firms gained on positive broker reports.

(Writing by Sinead Carew; Editing by Edwin Chan and Tim Dobbyn)