Apple Shakes Up Smartphone Market With iPhone 5S, Cheaper iPhone 5C

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Apple Tuesday unveiled two new iPhone models, confirming months of speculation that both a more sophisticated and a lower-end version of its popular smartphone were in the works.

As rumor had it, Apple took the wraps of the iPhone 5S, a souped-up, more enterprise-ready version of the prior-generation iPhone 5. The tech giant also introduced the iPhone 5C, a cheaper iPhone that comes in a variety of colors, and, more notably, marks Apple's entry into the lower-end smartphone market.

Both of the phones feature Apple's latest mobile software, iOS 7, and will be available starting September 20. The iPhone 5S is priced at $199 for the 16 GB model, $299 for the 32 GB model, and $399 for the 64 GB model. The iPhone 5C will start at $99 for an 8 GB model, and $199 for a 32 GB model.

The iPhone 5S and iPhone 5C represent Apple's latest, not-so-secret weapons for competing with smartphone rivals including Samsung and, more recently, Microsoft, which upped its own devices game with its $7.2 billion acquisition of Finnish smartphone maker Nokia earlier this month.

While still the dominant smartphone player in the U.S., Apple's share of the worldwide market has slipped; industry analyst IDC reported recently that iOS' share in the worldwide smartphone market was 13.2 percent in the second quarter of 2013, compared to 16.6 percent in the same period last year. Android and Windows Phone, meanwhile, saw increases during the same period.

According to Apple CEO Tim Cook, the new iPhone 5S and iPhone 5C will completely replace the iPhone 5. Apple will not sell the iPhone 5 at a reduced price, as it has with other older-generation iPhones upon the launch of a new model.

"In the past, when we introduced a new iPhone, we lowered the price of the old iPhone," Cook said at the launch event Tuesday. "This year we aren't going to do that. This year, we're going to replace the iPhone 5 with not one, but two new designs."

The first of those designs, the iPhone 5S, includes Apple's new 64-bit A7 processor, which the company said delivers up to twice the CPU and graphics performance compared to the A6 processor inside the iPhone 5. The A7 chip makes the iPhone 5S the world's first smartphone to support a 64-bit "desktop-class" architecture, Apple said, making everything from launching apps to editing photos feel faster and smoother than on the iPhone 5.

Apple said 32-bit applications can still be supported on the iPhone 5S.

Also new with the iPhone 5S is Touch ID, a built-in fingerprint reader. The reader, which could help the iPhone make new inroads with enterprise users, is built into the home button and leverages a touch sensor to take a high-res image of a user's fingerprint. The feature then stores and encrypts that image, allowing users in the future to unlock their phone, or even download apps from iTunes or the App Store, with the swipe of a finger.

NEXT: Meet The iPhone 5C

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