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Apple Inc. is updating its software for iPhones so that users can cut, copy and paste text — a basic computing feature that was missing from the gadget that seems to do everything.

Overall, the new software will include more than 100 new features, Apple said. Some functions will not work on all devices, though — the multimedia messaging feature, for example, will be available only on the second-generation iPhones that were released last year.

Mike McGuire, an analyst with Gartner Inc. said the new software features “were neat to see.”

“I think we’re all relieved to see cut, paste and copy,” said McGuire, who also called the ability to search across multiple applications “very cool.”

Apple is still working on a way to let people funnel wireless Internet access to a computer by connecting it to an iPhone. Some rival smart phones, such as several BlackBerry devices made by Research In Motion Ltd., already allow such “tethering,” though it usually costs consumers extra, on top of their regular monthly cell phone bills. Forstall did not offer a release date for that feature.

Apple shares rose $4.24, 4.4 percent, to close at $99.66.

At an iPhone event for journalists Tuesday at Apple headquarters, the company also pledged to broaden the way that third-party software programmers can build and sell content for the device.

Among other things, software developers now will be able to create applications that have items for sale within them, such as electronic books or additional levels of a video game. And developers will be able to access the music within users’ iPhone libraries, so songs they own can be included in games, for example.

Despite the adulation over the iPhone, which shook up the smart phone market after launching in 2007, many users wondered why it couldn’t cut and paste text. Scott Forstall, Apple’s senior vice president of iPhone software, said it was “not obvious” how to overcome several hurdles, including getting cut and paste to work with the device’s touch-screen interface.

Now, Apple said, the third generation of iPhone software, due to be released this summer, will let users copy information from notes and Web pages, and let people move text between different applications. Users who erroneously paste text can shake the iPhone to get an option to cut it.

The new software will be available in a free download for iPhones. Getting the software on the iPod Touch will cost $9.95.

In another effort to make the device more useful, Apple promises a search function called “Spotlight” that lets people hunt for information in multiple applications at once, including notes, the calendar and iTunes.

Other twists in the new iPhone software include the shake-to-shuffle-songs capability first introduced on the latest iPod Nano; a voice memo application; and a function that will let the iPhone work with Bluetooth headphones and speakers — a boon to people who want more options for playing the music stored on their iPhones. Apple is adding the ability to send multimedia messages like photos and audio clips, too.

Who needs ”Mario” when you can play music with your nose?

The result: Games that defy the old formulas, which have kept the gaming industry in a hit-driven rut for a decade. And the gaming developers who gathered in San Francisco Thursday at the iGames Summit say there’s more to come. New features introduced by Apple earlier this week will give developers the ability to sell in-game items such as virtual guns and pets, dole out extra levels, or find friends playing on their iPhones or iPods for a pick up match. “I’m totally ecstatic,” says Shervin Pishevar, chief executive and co-founder of the Social Gaming Network.

The changes promise to let Apple’s army of geeks and professional game developers push the iPhone’s oddball designs even further. Unlike a typical smart phone, the iPhone sports a touch screen and an accelerometer, forcing developers to build applications that rely on users touching, tilting, shaking and even blowing on their iPhones.

And unlike the portable gaming gadgets built by Sony and Nintendo, the iPhone and the iPod touch are built to do much more than just games. As a result, it’s the one gadget even hard-core gamers admit they take everywhere. “It’s a revolution,” says Intel and Motorola veteran Jason Rubinstein, an entrepreneur whose latest project is now in stealth mode.

Apple’s smartest move, however, has been to bypass the giant game studios and the brick-and-mortar game stores to connect the geeks with the mass market directly. IPhone and iPod touch users can download software to their phone, over the air, with the touch of a button, rather than rolling down to the local Best Buy to pick up cartridges.

And to ensure there’s always something in stock at its virtual store, Apple unveiled free software development tools that made all those features accessible to videogame developers. “I’ve worked on every console on the sun, and hands down, by far Apple has provided the best development environment,” says Neil Young, chief executive and founder of ngmoco, told the iGames Summit audience.

Just ask Steve Demeter. While working a day job creating ATM software for a bank, Demeter put together the game app Trism for the iPhone in his free time. The result: a hit that earned Demeter $250,000 in its first two months.

To be sure, iPhone game developers are growing in size and sophistication. Venture capitalists such as Kleiner Perkins and Morgenthaler Ventures are moving in. And gaming powerhouses such as Sega have introduced games for the iPhone. There’s still plenty of space for the little guys: An Electronic Arts employee canceled his appearance at the iGames Summit and a replacement was not sent.

For years, the videogame business has been all about billion-dollar brands built by rock star game developers and backed by armies of coders and artists, voice actors and marketing executives. Nintendo has Shigeru Miyamoto, creator of “Super Mario” and “Donkey Kong.” Microsoft has “Master Chief,” the star of the “Halo” franchise. And everyone is fighting to land the Houser brothers and their blood-soaked “Grand Theft Auto” franchise on their console next.

When Apple wants to impress an audience, however, it turns to Ge Wang, an assistant professor at Stanford who likes to show off a video clip of a woman playing “Music of the Night” on her iPhone by blowing through her nose. When Apple introduced its new iPhone software earlier this week, Wang took the stage to stun the audience by blowing into an iPhone to belt out a virtual trombone duet. Top that Bono.

The geeks with the imaginary trombones have the momentum lately, and Apple is doing everything it can to keep them rolling. Since the launch of the App store eight months ago, Apple has turned the videogame industry’s star system on its head with a 40,000-strong collection of developers who have built than 25,000 applications for the iPhone and iPod touch.

Users have downloaded more than 800 million applications over the past eight months. Roughly a quarter of them are games, and most were created by independent developers, two- or three-person pickup teams with an idea and a little spare time

The archival exhibit shows other Sony products that have been discontinued or lost out to competition over the years — the Betamax video cassette recorder, the Trinitron TV, the Aibo dog-shaped robotic pet.

The Walkman exhibit, which runs through Dec. 25, shows models that are still on sale, some about the size of a lighter that play digital music files.

Also showcased are messages from Morita and his partner Masaru Ibuka, who always insisted a company could never hope to be a winner by imitating rivals but only by dashing stereotypes.

“All we can do is keep going at it, selling our Walkman, one at a time,” said Sony spokeswoman Yuki Kobayashi. “Thirty years is a milestone for Sony. But we hope the Walkman won’t be seen as just a piece of history.”

A Sony Corp’s employee walks by a special display commemorating the Walkman’s 30th anniversary that opens Wednesday, July 1, 2009, at Sony Archive building in Tokyo, Japan. (AP Photo/Shuji Kajiyama)

Sony Corp.’s employee Rumi Yamaguchi smiles in front of a special display commemorating the Sony Walkman’s 30th anniversary that opens Wednesday, July 1, 2009, at Sony Archive building in Tokyo, Japan. (AP Photo/Shuji Kajiyama)

Sony Corp. employee Rumi Yamaguchi looks at Sony Walkman products including the first Walksman, top shelf, second from left, at a special display that opens Wednesday, July 1, 2009, commemorating the handy music player’s 30th anniversary at Sony Archive building in Tokyo, Japan. (AP Photo/Shuji Kajiyama)

When the Sony Walkman went on sale 30 years ago, it was shown off by a skateboarder to illustrate how the portable cassette-tape player delivered music on-the-go — a totally innovative idea back in 1979.

Today, Sony Corp. is struggling to reinvent itself and win back its reputation as a pioneer of razzle-dazzle gadgetry once exemplified in the Walkman, which Wednesday had its 30th anniversary marked with a special display at Sony’s corporate archives.

The Japanese electronics and entertainment company lost 98.9 billion yen ($1.02 billion) in the fiscal year ended March — its first annual loss in 14 years — and is expecting more red ink this year.

The manufacturer, which also makes Vaio personal computers and Cyber-shot cameras, hasn’t had a decisive hit like the Walkman for years, and has taken a battering in the portable music player market to Apple Inc.’s iPod.

Sony has sold 385 million Walkman machines worldwide in 30 years as it evolved from playing cassettes to compact disks then minidisks — a smaller version of the CD — and finally digital files. Apple has sold more than 210 million iPod machines worldwide in eight years.

There is even some speculation in the Japanese media that Sony should drop the Walkman brand — a name associated with Sony’s rise from its humble beginnings in 1946 with just 20 employees to one of the first Japanese companies to successfully go global.

“The Walkman’s gap with the iPod has grown so definitive, it would be extremely difficult for Sony to catch up, even if it were to start from scratch to try to boost market share,” said Kazuharu Miura, analyst with Daiwa Institute of Research in Tokyo.

Miura believes Sony can hope to be unique with its PlayStation 3 and PlayStation Portable video game consoles, but it has yet to offer outstanding electronics products that exploit such strengths.

The Nikkei, Japan’s top business newspaper, reported recently that Sony set up a team to develop a PSP with cell-phone features. But Miura said the idea was nothing new, since the iPhone, another Apple product, has gaming features, and Sony isn’t likely to have such a product soon.

Earlier this year, Sony Chief Executive Howard Stringer announced a new team of executives and promised to bring together the hardware electronics and entertainment content divisions of Sony’s sprawling empire — an effort that he said will turn around Sony and restore its profitability.

But Stringer, and his predecessors, have been making that same promise for years.

When the iPod began selling like hotcakes several years ago, a Japanese reporter asked Shizuo Takashino, one of the developers of the original Walkman, why Sony hadn’t come up with the idea. Afterall, the iPod seemed like something that should have been a trademark Sony product.

Takashino had been showing reporters the latest Walkman models, which played proprietary files. Sony has been criticized for sticking to such proprietary formats. One major reason for the iPod’s massive popularity was that it played MP3 files, which are widely used for online music and compatible with many devices.

In a special display at Tokyo’s Sony Archive building, opening Wednesday to commemorate the Walkman’s 30-year history, an impassioned Akio Morita, Sony’s co-founder, speaks to employees in a 1989 video to celebrate the 10th anniversary of the Walkman.

“We can deliver a totally new kind of thrill to people with the Walkman,” said the silver-haired Morita, proudly wearing a gray factory-worker jacket and surrounding himself with dozens of colorful Walkman machines. “We must make more and more products like the Walkman.”

Morita acknowledges in the video that the Walkman doesn’t feature any groundbreaking technology but merely repackaged old ones — but did so in a nifty creative way. And it started with a small simple idea — enjoying music anywhere, without bothering people around you.

The original Walkman was as big as a paperback book, and weighed 390 grams (14 ounces). It wasn’t cheap, especially for those days, costing 33,000 yen ($340).

But people snatched it up.

Other names were initially tried for international markets like “soundabout” and “stowaway.” Sony soon settled on Walkman. The original logo had little feet on the A’s in “WALKMAN.”

Many, even within Sony, were skeptical of the idea because earphones back then were associated with unfashionable, hard-of-hearing old people. But Morita was convinced he had a hit.