Apple unveils new lower-cost iPhone

Apple has unveiled its latest iPhone devices, upgrading the current iPhone 5 and introducing a new lower cost model.

But many of the details of today's event were leaked well in advance, meaning there were few surprises for the crowd gathered in San Francisco and Berlin to watch CEO Tim Cook and other Apple executives give details on the company's latest smartphones.

“The business has become so large that this year we are going to replace the iPhone 5 and we are going to replace it with not one but two new designs. This allows us to serve even more customers,” Mr Cook said.

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Apple Senior Vice President of Worldwide Marketing at Phil Schiller speaks about the new iPhone 5C during an Apple product announcement at the Apple campus in Cupertino, California. Photograph: Justin Sullivan/Getty Images

The company showed off an improved iPhone 5 with a better camera, a faster chip and a fingerprint reader built into the device’s home button.

The iPhone 5S, which will be available in gray, gold and silver, comes with a new 64-bit A7 chip. Apple said the new phone was the world’s “first and only smartphone” with a 64-bit chip.

Apple also made it clear it meant business in the lower cost end of the smartphone market, with the iPhone 5C, a colourful smartphone with polycarbonate casing and steel frame that doubles as an antenna. It has similar specs to the iPhone 5, but comes with a higher capacity battery, and a high definition camera for FaceTime.

The 5C handset is firmly pitched at the mid-range of the market, with Apple announcing it would be available for as little as $99 for the 16GB version with a two year contract. It is not clear what the device will cost outside the US.

The new devices will run iOS7, the redesigned version of Apple’s mobile operating system.

It is not yet clear when the new iPhones will go on sale in Ireland, but both devices will launch in the UK and US, among other countries, on September 20th.

The company also announced that iPhone users not upgrading to the latest handsets will get the updated software from September 18th. The new iOS7 software will be compatible with models from the iPhone 4 and newer, and iPad models as far back as the second generation. The fifth generation iPod Touch will also use the new software.

Mr Cook told attendees at Apple’s event in San Francisco that it will ship its 700 millionth iOS device – which includes iPads, iPhones and iPod Touch devices – in the coming weeks.

In its most recent quarterly earnings in July, Apple said it had sold 31.2 million iPhones in three months.