The iPhone 5 looks similar to previous models but has a larger screen and is lighter and thinner than the iPhone 4S. The company says the larger screen will make it easier to check and send e-mails and to view Web pages with the phone in your hand.
The phone also comes with a new, faster processor called the Apple A6; and it connects to mobile carriers with a 4G LTE connection, making for speedier Internet browsing.
"It just screams," said Apple marketing chief Phil Schiller, in introducing the device.
Apple's redesigned iPod touch, iPod nanoThe iPhone 5 starts at $200 with a two-year mobile contract and will be available on September 21 in the United States. Pre-orders for the device begin on Friday.
The iPhone 5 is 18% thinner and 20% lighter than the current version, the iPhone 4S. It has a 4-inch screen, measured diagonally, compared to a 3.5-inch screen on previous versions of the phone. It is the same width as the iPhone 4S, but is taller than that phone; and the iPhone 5 is made entirely of glass and aluminum.
Those features are likely to be popular with consumers. Another, however, may cause some backlash. The new iPhone comes with a different-sized charging cord, meaning speakers and radios designed to work with the old iPhone cord won't function seamlessly with the new iPhone. The company did create an adapter, however, so that the old devices aren't useless.
Apple calls this new cord "lightning," and says it is 80% smaller than the previous iPhone cord.
During a press conference in San Francisco, Apple also announced an update to its mobile operating system, iOS 6, which accommodates the larger iPhone 5 screen.
The new operating system adds another row of icons to the phone's home screen; includes a new, 3-D version of digital maps; and has a feature called Passbook, which lets people pull up airline tickets or payment apps from the locked home screen.
Apple also unveiled a new line of iPods, including an iPod nano with a 2.5-inch touchscreen. That device, which starts at $150, is able to pause live radio. And Apple updated its headphones, now called Earpods, to have better audio quality and a new look.
For many tech fans, the fall Apple press event is the highlight of a season filled with gadget announcements and releases. Last week, Amazon unveiled its latest Kindle Fire tablets, and Nokia and Motorola announced new smartphones. HTC has an announcement scheduled for later in the month.
The companies are rushing to get their products our in time for the holiday season, where they will battle it out for consumer dollars in an increasingly crowded mobile-device market.
This is Apple's sixth iPhone model. Steve Jobs unveiled the first iPhone six years ago on a stage just one block away in the Moscone Center.
Since then the iPhone has taken off, selling around 244 million units around the world. According to research firm IDC, the iPhone and it's iOS operating system makes up 16.9% of the worldwide smartphone market, coming in behind all phones running the Android operating system, which accounts for 68.1% of the world's smartphones.
The winning streak has carried over to Apple's stock price, which hit an all time high of $683.29 a share last Friday.
Some people weren't impressed with the new device, however.
"Apple doesn't innovate anymore," one commenter wrote on CNN's live blog from the event. "They got where they are today by taking bold risks, but they are afraid to change anything that would affect their No. 1 product. Who could blame them?"
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