Apple Inc introduced the newest version of its iPhone on Monday, hoping to stay a step ahead of a growing cast of rivals like Google Inc in the red-hot smartphone market.

Chief Executive Steve Jobs sketched out the new iPhone 4 with more than 100 new features to a packed room at the company's developers' conference in San Francisco.

IPhone 4 comes with many features that analysts expected, including a better display and a front-facing camera that could potentially be used for videoconferencing. It is 24 percent slimmer than the current 3GS model.

Apple's shares had fallen as much as 1.5 percent in early trading before bouncing back with the broader stock market. They were holding steady in late trading.

Its stock has already gained more than 20 percent this year, and the company overtook Microsoft Corp to become the world's most valuable technology company.

Few had expected major technological advancements from the 3GS.

Still, the iPhone remains the gold standard in the smartphone market, and Apple's product launches are the most closely watched events on the technology calendar.

The iPhone has been a huge success since debuting in 2007, boosting Apple's margins, transforming the company into one of the world's leading mobile device makers and setting the competitive landscape in a smartphone battle that will play out for years.

Though gaining share globally, it faces a slew of new competitors, including Motorola Inc and HTC, designing high-powered handsets based on Google Inc's Android software.

Only last year, Research in Motion Ltd was seen as Apple's top rival. While the company's BlackBerry remains the smartphone of choice for many corporations that need fast email, Apple has made strides in that market as security concerns addressed by the BlackBerry eased.

Research in Motion's shares were down 3.7 percent, or $2.18, at $57.50 in midday trading on Nasdaq. Apple shares were little changed at $256.35 in afternoon trading on Nasdaq.

(Editing by Edwin Chan and Derek Caney)