I am running 10.10 version.
I install APC as
sudo apt-get install php-apc
It gets APC (3.1.3p1) installed. The latest one is 3.1.10 right now.
How can I update to latest one?
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You need to
Assuming you have PEAR/PECL installed (and any other necessary dependencies), this should install APC from that repository, which may be at a higher version than the Ubuntu package. It also requires 'libpcre3-dev' to be installed in order to compile properly.
sudo apt-get install libpcre3-dev sudo pecl install apc
Since you are running a released version of ubuntu, you shouldn't expect newer upstream versions of software to be released for that version of ubuntu, only security patches to older versions. You can see here that 3.1.10 has been released for a newer release of ubuntu. You can try backporting that version.
To backport, first you need to add a deb-src line to sources.list that can download source packages for quantal.
deb-src http://us.archive.ubuntu.com/ubuntu/ quantal main universe
Add only that line to sources.list, do not add a deb line, just deb-src. Then run
apt-get update. Then
apt-get build-dep php-apc ; apt-get install build-essential will install the packages needed for building php-apc, and
apt-get source -b php-apc should download the source for apc, and build a new .deb in the current directory. If this works, you can install the deb with somethign like
dpkg -i ./php-apc-$newversion.deb
However, if you go this route (or pretty much any other route which moves you away from the official ubuntu package for your release), you are on your own for security updates to this package. And because of this, you should question whether you really need the newer version, or of you just want it because 10 > 3.