In what's been classed as a 'make or break' event for Apple, the tech firm has unveiled a cut-price handset called the iPhone 5C as well as a high-end model called iPhone 5S.
The release of the iPhone 5C marks a step away from Apple's luxe image.
Many believe the move is a desperate bid to poach Samsung buyers, as the Korean company and its plastic, cheaper handsets go from strength to strength.
In what's been classed as a 'make or break' event for Apple, the Californian-based tech firm has unveiled its plastic iPhone 5C that comes in a range of colours and will cost $99. It has a new HD Facetime camera, 4-inch Retina display and improved battery
The iPhone 5S is a modified version of the iPhone 5. It comes in three colours - gold, silver and slate - and was Apple's senior vice president of worldwide marketing, Phill Schiller, pictured, claimed it is twice as fast as the current handset
THE IPHONE 5C SPECIFICATIONS
4-inch Retina display.
A6 processor - same as the iPhone 5.
The battery is slightly larger than it was on the iPhone 5.
It has the same 8-megapixel rear camera and a newFaceTime HD cameras.
It supports 'more LTE bands than any other smartphone in the world.'
Dual-band Wi-Fi, Bluetooth 4.0
The handset will cost $99 for 16GB and $199 for 32GB.
UK pricing is yet to be announced.
Apple traditionally releases a brand new handset one year, before releasing a follow-up model with incremental changes the next, for example, the iPhone 4 and the iPhone 4S.
This year, however, was the first time Apple had been linked to two new handsets at the same event.
And in announcing the new devices, Apple's CEO Tim Cook declared the company would be discontinuing the current iPhone 5 model.
The iPhone 5C has a 4-inch Retina display.
It has the same A6 processor as the current iPhone 5 model, as well as the same 8-megapixel rear camera.
The FaceTime front-facing camera has been improved to HD, too.
It is made of polycarbonate plastic and is reinforced with a steel frame, which acts as the phone's antenna.
Apple's iPhone 5C will cost $99 for 16GB and $199 for 32GB, with UK pricing yet to be announced.
The iPhone 5S comes in three colours - slate, gold, and silver - and is made of high-grade aluminium.
Apple's senior vice president of worldwide marketing, Phil Schiller called it 'perhaps the most forward thinking phone anyone has ever made.'
It is the first handset to run 64-bit A7 chip and is said to be twice as fast as the iPhone 5.
The graphics are five times faster than the iPhone 5 and the phone was said to have 10 hours of 3G talk time, 10 Hours LTE browsing and up to 250 hours of battery standby.
The iPhone 5S costs $199 for 16GB, $299 for 32 GB and $399 for 64GB.
Both devices can be pre-ordered on 13 September and the handsets go on sale on 20 September.
The new handsets will be shipped with the iOS 7 software, announced in June.
Apple recapped the latest version of its mobile software at the event.
‘iOS 7 is the latest version, and next month we will ship the 700 millionth iOS device. iOS 7 will quickly become the world’s most popular mobile operating system.
‘Virtually overnight hundreds of millions of people will upgrade’ said Craig Federighi, Apple's senior vice president of software engineering.
The software, overseen by Brit designer Sir Jonathan Ive, will be available from 18 September for the iPhone 5 or iPhone 4S. The firm added that it will come to older iPhones 'later'.
Apple's iPhone 5S has a fingerprint scanner built into the 'home' button capable of handling multiple fingerprints. Called Touch ID, the feature lets users buy apps and unlock the device at the touch of a button
Apple's colourful iPhone 5C is made of plastic and reinforced with steel that works as an antenna. The battery is slightly larger than it was on the iPhone 5 and it has the same 8-megapixel rear camera
The iPhone 5S will also be made available in China at the same time as other countries for the first time ever.
Apple recently lost smartphone market share to main rival Samsung, dropping to 14 per cent - its lowest for three years - because of ‘lacklustre’ iPhone 5 sales and tougher competition from rivals.
Experts believe that tonight's event will be 'make or break' for the Cupertino-based firm.
Jason Jenkins, editor of CNET UK told MailOnline: ' People are increasingly choosing rival smartphones that have larger screens, are more powerful and are cheaper.
Apple's iPhone 5C, pictured here being announced by Schiller, is made of 'polycarbonate' but is reinforced with steel that acts as an antenna. The handset will cost $99 for 16GB and $199 for 32GB. UK pricing is yet to be announced.
'Apple seems happy with that, as it makes more money per phone than its rivals: it doesn't need to sell more mobiles than everyone else to win the smartphone war.
'To get round this, Apple has relied until now on announcing a new model and simply making the previous year's cheaper. 'But at some point that strategy isn't going to work so well, and it's going to have to release a model that's specifically designed to tempt budget buyers.'
In the year since Apple unveiled its iPhone 5 handset, for example, Samsung has released or announced 16 new models in its Galaxy range including the popular Samsung Galaxy S4 and S4 Mini.
Craig Federighi, pictured, introduced the new iOS 7 software in June. It will be released to handsets on 18 September. Federighi recapped the features at the annual event because Apple's new handsets will be shipped with the new operating system
Each of the best-selling Galaxy models feature plastic casing, which ultimately makes them cheaper to produce than Apple's aluminimum and glass handsets.
Analysts claimed Apple would be looking to tap into this emerging market, which is particularly prevalent in China, with a low-cost, plastic iPhone 5C.
This was evident in Apple's choice to run an event at Apple's headquarters in Cupertino alongside mirror events in Beijing, Tokyo and Berlin.
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