VIDEO: See our video review of the new Apple iPhone 3GS

The third addition to the iPhone range, the 3GS, is a small step forward for Apple compared with the first two handsets, in that it introduces several features that similar phones have had for years.

There are actually two new products here: the iPhone OS 3.0 operating system update that users of older iPhones can get through iTunes, and the new hardware. The software introduces the ability to cut and paste text and images from documents or web pages and to send photos by MMS. The long-called-for landscape keyboard for typing emails and text messages has also been included.

More people now use phones to take photos and the 3GS has an improved 3-megapixel camera. It has auto-focus built in so that you can tap a specific part of the screen to bring that area into focus. This feature is demonstrated in our video review of the iPhone 3GS.

The iPhone also adjusts colour and light settings to suit. The quality is fair for sharing photos digitally, but prints larger than 6x4in were average at best.

Users can also take short video clips and trim them. Once complete, photos and videos can be sent using MMS or email, while videos can also be uploaded to a Youtube account.

The 3GS has a built-in compass that works with Google Maps: open a map, tap the compass symbol and a cone symbol shows which way you're facing.

One of the iPhone's most talked-about new features is voice recognition, which enables users to tell it to call someone or play a specific artist, album or playlist, although it can't be used to select specific songs.

It was impressive but the number of commands available is limited and they need to be structured in a specific way: for example, 'play, artist, The Beatles' – not 'play The Beatles'.

There are some downsides to the iPhone – for PC users, synchronising its calendar with anything other than Outlook requires additional software.

And then there's the price. If you already have an iPhone on contract with O2 you can't upgrade until six months before it ends, and even then you have to pay up the rest of the contract's value.

New pre-pay customers will pay upwards of £340 while new monthly contracts start at £30 per month plus £184 for the phone. O2 has a page that gives full details of iPhone prices and tariffs.

For ease of use and all-round usefulness, the iPhone continues to set the benchmark for smartphones. This is neatly demonstrated by the cut-and-paste tool – double-tap a word and drag the bars to select the text you need before choosing to copy or cut. Double-tap a blank spot in a document and you'll get the option to paste. It's neat and intuitive.

It's fair to hail the iPhone's style but there's real substance to it too. Whether most of us can afford to buy or upgrade it is another matter, although cheaper deals for the iPhone 3GS are beginning to emerge online, such as by getting a 16GB iPhone 3GS with 12-month Simplicity tariff.

All the features mentioned in this review are demonstrated in our video guide to of the iPhone 3GS.