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New iPhones unveiled

Apple has revealed the new, cheaper iPhone 5C and the flagship iPhone 5S.

The new Apple iPhone 5C which will come in a variety of colours, a plastic body and will sell at $99 in the US, making it more accessible in emerging markets. Picture: Twitter

CUPERTINO, CALIFORNIA - Apple on Tuesday evening unveiled its new operating system and two new iPhone models during a long-awaited announcement at its California headquarters.

One of the new phones, the iPhone 5C, is priced to bring one of the industry's costliest smartphones within reach of the masses in poorer emerging markets.

Chief Executive Tim Cook kicked off the event, which also ushered in the pricier iPhone 5S.

Cook expects Apple to ship the 700 millionth device based on iOS mobile software sometime next month.

Apple says iOS 7 will be available 18 September and it will be available for all iPhone 4 devices and later the iPad 2, followed by the iPad Mini and the iPod Touch 5th generation.

Apple's Pages, Keynote, Numbers, iPhoto, and iMovie apps will be freely available for new iOS devices.

IPHONE 5C

The iPhone 5C will be available in a range of bright plastic covers (white, blue, pink, and yellow) which will be interchangeable.

The 5C will feature a long-lasting battery and otherwise similar features as iPhone 5, but at a lower price.

In the US, it will sell for $99 for the 16GB model and $199 for the 32GB offering when bought on a 24-month contract. The cases will cost $29.

As yet, there is no news as to when it will become available in South Africa.

But it is likely it will not take long to appear in Africa and other emerging markets where the 5C is earmarked to make a major impact among lower-income consumers.

There was speculation as to whether the model would even be available in more mature markets like Europe or the United States considering the risk that it will begin cannibalising sales of the flagship 5S.

Globally, the market for cheaper smartphones priced around $300 (the iPhone 5 now starts at $649 without a contract) may grow to 900 million units by 2015, Bernstein Research analyst Toni Sacconaghi estimated.

Assuming Apple manages to capture just 10 percent of that market, the 5C would bring in revenue of $30 billion annually.

IPHONE 5S

The new flagship iPhone 5S will be a replacement to the iPhone 5. It will come in gold, silver and slate featuring a new 65-bit chip called the A7, "a world first".

The phone will feature hugely improved performance.

Speed and graphics will be 56 times faster than the current model.

Apple showed off the camera specs of the 5S with a focus on the sensor with a newly designed lens and the two different flashes. It will also include auto stabilisation.

The phone also features a Touch ID Sensor that uses your finger to access the phone/buy apps and will also allow the phone to handle multiple users.

The model will sell at $199 for 16GB, $299 for 32GB and $399 for the 64GB model.

It will be available in the US from 20 Sept and another 100 countries including South Africa by the end of the year.

NOKIA'S CHEEKY RESPONSE

During the unveiling, Nokia UK tweeted a picture of their own range of Lumia smartphones with the tagline "Imitation is the best form of flattery."

The tweet was a clear swipe at Apple's use of interchangeable, colourful covers for the iPhone 5C which Nokia already offers.

MARKET RESPONSE

Shares in Apple, which had been in negative territory most of the morning, briefly went positive and were down around 1.5 percent towards the end of the event.

But the world's most valuable technology company is trying to beat back rivals like Samsung and Huawei in markets like India and China, where it is quickly losing ground and Wall Street approves of the move to offer a more basic version of the device.

However, some investors warned initially that it would reduce margins and potentially tarnish a brand that has been linked to premium users since its 2007 inception.

Now they hope a bigger emerging-market presence can help reverse a 29 percent fall in the company's share price since it hit a record high of $702.10 a year ago. The selloff was fuelled by fears of slowing growth and a perception that Apple's ability to innovate and shake up industries was dwindling.

The new iPhones, coupled with a belief that Apple will announce a deal with the world's largest carrier in China, have spurred investors to build bullish share and options positions in the company over the past two weeks.

Also sparking Apple's upward momentum was hedge fund billionaire Carl Icahn's revelation last month that he had taken a large position and was pushing for the company to expand its program of share buybacks.

He has said the stock may rise to as much as $700 if Cook pushed for a larger buyback. The shares were down 0.5 percent at $503.64 in morning trading.

Industry observers said Apple had not turned out a category-defining electronic device since late co-founder Steve Jobs made a bet on the iPad in 2010. Speculation revolves around a smartwatch along the same lines as Samsung's recently introduced Galaxy Gear, or some sort of TV product.

But analysts said neither was likely to generate numbers anywhere in the neighbourhood of the iPhone, which supplies half of Apple's revenue and is the company's highest-margin product.