At a much-hyped launch, Tim Cook, Apple’s chief executive, took to the stage at the company’s headquarters at Cupertino, California, and announced: “Previously we have lowered the price, but now we are going to replace the iPhone 5 with not one but two new designs.”
The move comes as rival phones from Samsung and other manufacturers continue to challenge Apple in the smartphone market worldwide.
Apple also took the opportunity to introduce brightly coloured options for customers.
The release of the cut-price iPhone 5C – which comes in vivid green, blue, yellow, pink and white – marks the technology giant’s move away from its traditional upmarket luxury image and is a bold attempt to woo billions of potential customers in poorer emerging nations.
Mr Cook promised the £63 phone would come with “all the great technology that customers have loved with the iPhone 5”.
The second phone, the 5S – dubbed the “gold standard in smartphones” by the technology giant – will come in traditional Apple colours of silver and slate grey as well as a version with a new golden champagne hue.
With a fingerprint scanner built into the phone’s “home” button, Phil Schiller, senior vice- president of worldwide marketing at Apple, described it as “the most forward-looking phone we have ever created”.
The iPhone 5S’s home button still needs to be pressed in, but a stainless-steel ring around it detects the user’s fingerprint, making it easier to unlock or buy music from iTunes.
“Touch ID” uses a laser-cut sapphire crystal, along with a touch sensor to take a high-resolution image of a fingerprint and analyse it, providing accurate readings from any angle.
The phone will include a new chip, the A7, that is twice as fast as its predecessor.
Mr Schiller said the new phone can run more health and fitness applications, which have become increasingly popular with customers as more people use them to track exercise routines, calorie intake and even sleep patterns.
The 5S camera has received major upgrades, including several automatic features designed to produce better photos.
It has a two-tone flash feature that is designed not to clash with the colours in the room or a person’s skin colour.
The camera, called iSight, has “auto image stabilisation”, which helps avoid blurry pictures, and a slow-motion camera for video.
Tying the fingerprint scanner to payments could open new revenue channels for Apple.
Apple also said its next mobile operating system, iOS 7, will be available as a free download from 18 September.
Craig Federighi, head of software at Apple, said that “downloading iOS 7 is like getting an all new device”.
The new operating system
can be downloaded on the iPhone 4 and later models, as well as on its tablets, beginning with the iPad 2.
Apple also said it expects to ship its 700 millionth iOS device next month. Mr Cook predicted that iOS 7 will become the
most popular mobile operating system in the world.
However, Apple’s share price fell $3.17 to $503.10 during the event.
The new iPhones go on sale in the United States, UK, China, Australia and Canada on 20 September. It will be the first time China has been included in the initial wave of sales.
Latest handsets will be faster and better equipped than ever
Costs: $99 (£63), with two year contract, for 16GB and $199 (£126), with contract, for the 32GB
Features: has a new HD Facetime camera, 4in Retina display with an integrated touch layer, improved battery life
Costs: £549 for the 16GB handset £629 for 32GB and £709 for 64GB
Features: Touch ID to unlock the phone at the touch of a finger; will be 20 times faster than its predecessor, the iPhone 5, and runs on an A7 chip, making it the world’s first 64-bit mobile phone; battery allows for ten hours of 3G talk time, 250 hours on standby, ten hours of internet browsing and 40 hours of music playback