Playing close to the vest as always, Apple executives on Tuesday unveiled a host of minor functional changes coming in the next iPhone software update, which is due around mid-year. However, the company fell well short of satisfying the rumor mill, introducing no new iPhone hardware designs and no Mac tablet/netbook. Apple also refused to discuss a number of eagerly-anticipated features, like Flash support and tethering capabilities.

"The new iPhone OS 3.0 is a major software release packed with incredible new features and innovations for iPhone customers and developers alike," said Apple senior vice president Philip Schiller. "It will keep us years ahead of the competition." That last bit is quite telling: Apple's pre-announcement of new iPhone features seems designed to stave off excitement about Palm's upcoming Pre smart phone, which has a number of features the iPhone currently lacks.

So what is Apple adding to iPhone 3.0? It will finally include cut-and-paste functionality, a feature users have been clamoring for since the original iPhone announcement two years. (Cut-and-paste functionality was introduced to the earliest PCs 30 years ago.) It will support phone-to-phone wireless connectivity for multiplayer games. It will finally offer the Push notification system Apple promised to deliver by the end of last year. The company is opening up an application interface to the iPhone/iPod connector. And it is adding a host of smaller improvements, many of which--like landscape view in the Mail and Messages applications--have also been at the heart of two-year-old complaints about the phone.

Left up in the air is the fate of a long-rumored Mac tablet, which may be based on the iPhone or the traditional Mac platform and is expected to feature a 9- or 10-inch touch screen. Apple is expected to begin selling this device in Q3 2009 and will use it as a pseudo-netbook entry. Apple also did not discuss a third-generation iPhone design. Rumors have suggested that Apple will soon offer a low-end $99 version of the iPhone 3G as well as a more expensive version with 32GB capacity. Apple refused to discuss adding Flash support to the iPhone web browser, but the company did note that it was working on tethering, which would allow customers to use their iPhone as a (relatively) high-speed modem for PCs.

What's available now is a beta version of the iPhone 3.0 software development kit, which programmers can use to get started with the 1000 new APIs that Apple has added. Apple says that the iPhone 3.0 software update will be made available to users "this summer". It will be free on the iPhone and available for a $9.95 charge for iPod touch users. Certain iPhone 3.0 features will only be made available to the newest generations of the iPhone (3G) and iPod touch (2nd generation, or 2G).