Apple has given a preview of some of the 100 features that will be included in a new iPhone operating system to be launched later this year.
Apple founder Steve Jobs showcased seven of the features, including multi-tasking which will let users run more than one programme at a time.
The feature is already included in many other smartphones.
A mobile advertising platform is to be launched to allow the device to run ads on applications made by third parties.
iAd marks Apple's first foray into a potentially lucrative new market, and pits it directly against Google's search engine advertising model.
Apple will allow external developers to pocket 60% of ad revenue from iAd.
The Apple boss said the iPhone OS 4.0 update will be released first for the iPhone and iPod touch, and then the iPad, later this year.
'Be the best'
Apple boss Steve Jobs gave a demonstration of the multi-tasking feature showed the online radio station Pandora running in the background playing music while a user could either read news online or deal with email.
The iPhone OS 4.0 update will be released later this year

"We weren't the first to this party but we're going to be the best," he said.
Some of the other features unveiled at the presentation at Apple's headquarters in California include being able to create specific folders to store third party applications downloaded from iTunes, homescreen wallpapers, enhanced mail which will gather email from multiple accounts into one "unified" inbox and providing iBooks which is already on the iPad.
Mr Jobs said mobile users spend more time inside applications than searching the internet.
Therefore it made sense to have adverts within the applications - or apps as they are commonly termed.
"It's very clear that [Mr] Jobs believes that ads in the context of apps makes more sense than generic mobile search," said Tim Bajarin at consulting company Creative Strategies.
Changing mobile commerce?
Apple's move into mobile advertising was widely expected after it bought Quattro Wireless mobile advertising network for almost $300m (196m) in January.
Apples believes advertising inside applications is the future

****ysts say revenue from mobile advertising will jump dramatically this year.
Some ****ysts believe this will shift the paradigm in the mobile world.
"It has huge potential to really change mobile commerce," said Van Baker, Vice president of research at Garnter.
"The evidence so far is that very few transactions really happen in this space. Mobile is used to compare prices, find restaurants, movie times and the like but very little in the way of commerce."
Apple bought mobile ad company Quattro after failing to buy the market leader AdMob which was purchased by Google.
In a slight to the search giant, Mr Jobs said "Google came in and snatched them (AdMob) because they didn't want us to have them".
In 2009, mobile ads represented 12% of revenue but that number is expected to grow to 28% by 2012.
iPad demand
During the packed press event, Mr Jobs revealed that to date Apple has sold 50m iPhones. That number rises to 85m when the iPod touch is included.
Mr Jobs also gave an update on the iPad which went on sale in the US only at the weekend. It is expected in stores in the UK and part of Europe, as well as Canada and Australia at the end of the month.
Apple said it had sold 450,000 iPads as of Thursday. Mr Jobs added that 600,000 electronic books and 3.5m applications had been downloaded for the iPad in the last five days.
"We're making them as fast as we can," Mr Jobs said. "Evidently we can't make enough of them yet so we are going to have to try harder."