For the first time ever, Apple unveiled two new iPhones on Tuesday, a traditional upgrade of its iPhone 5 as well as a simpler, cheaper version.
Apple CEO Tim Cook said the iPhone 5S and iPhone 5C are a reaction to a changing smartphone market.
"Business has become so large that this year we are going to replace the iPhone 5 and we're going to replace it with not one, but two new designs," Cook said. "This allows us to serve even more customers."
The iPhone 5C was the first phone demoed at Tuesday's event at Apple's Cupertino, California, headquarters.
"It has an incredible all new design, one that's more fun, more colorful than any iPhone we've made yet," said Phil Schiller, Apple's senior vice president for marketing." In a video, Apple design guru Jonny Ive described the 5C as "beautifully, unapologetically plastic."
The phone will sell for as little as $99, for a 16GB version, and $199 for one with 32GB of storage (each with a two-year mobile contract).
In a departure, Apple will also be making its own cases for the 5C, selling in a variety of colors for $29.
The iPhone 5S is the more traditional update to the iPhone 5.
"It is the gold standard in smartphones," Schiller said.
The 5S features performance upgrades including what Apple calls a dramatic increase in processing speed.
It will have the first 64-bit chip in a smartphone -- Apple's A7 -- which Schiller said has tested at up to twice as fast as the iPhone 5's processor. It also will have a new feature, a motion co-processor, that will let the phone be used as a fitness tracker along the lines of a FitBit.
Schiller said battery life will be "the same or better" than the iPhone 5 and its camera will have 15% more active sensor space, improved white balance and auto-focus and a new flash.
Also, its camera will, for the first time on iPhone, allow video in slow motion.
Arguably the most dramatic new feature on the phone, though, is Touch ID, a fingerprint scanner for security. Users will be able to log into their phone, using the home button, and make purchases from iTunes using their fingerprint as a password of sorts.
The iPhone 5S will sell for $199 for a 16GB version, $299 for a 32GB model and $399 for the top-end 64GB phone.
Pre-orders for the iPhone 5C starts on September 13. Both versions are on sale starting September 20. Cook also announced the newest version of Apple's mobile operating system, iOS 7, will be released to the public on September 18.
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