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5C and 5S

New iPhone models unveiled

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iPhone 5s (photo courtesy Apple Inc.) iPhone 5s (photo courtesy Apple Inc.)

BARBARA ORTUTAY and MICHAEL LIEDTKE, AP Technology Writers

CUPERTINO, Calif. (AP) — Apple's latest iPhones will come in a bevy of colors and two distinct designs, one made of plastic and the other that aims to be "the gold standard of smartphones."

Apple unveiled the latest iPhone models during an event at its Cupertino, Calif., headquarters. The move comes as rival phones from Samsung and other manufacturers are challenging Apple in the competitive smartphone market.

The iPhone 5C will be available in five colors — green, blue, yellow, pink and white. CEO Tim Cook calls the 5C "more fun and colorful" than any other iPhone. The 5C has a 4-inch Retina display and is powered by Apple's A6 chip. It also has an 8 megapixel camera, live photo filters and a rear cover that lights up.

The iPhone 5C will cost $99 for a 16 gigabyte model and $199 for a 32 gigabyte model with a two-year wireless contract. The phone is expected to help Apple boost sales in China and other regions where people don't have as much disposable income to spend on new gadgets compared with the U.S. and Europe.

The second phone, the iPhone 5S, is "the most forward-looking phone we have ever created," said Phil Schiller, senior vice president of worldwide marketing at Apple. It will come in silver, gold and "space gray" and will run on a new chip, the A7, which is up to twice as fast as the A6.

Apple also said that its next mobile operating system, iOS 7, will be available as a free download on Sept 18.

Craig Federighi, head of software at Apple Inc., said at an event at the company's Cupertino, Calif., headquarters that "downloading iOS 7 is like getting an all new device."

The new system can be downloaded and installed on the iPhone 4 and later models, as well as on the tablets beginning with the iPad 2.

Apple also says it expects to ship its 700 millionth iOS device next month. Apple CEO Tim Cook predicts that iOS 7 will become the most popular mobile operating system in the world.

Investors seemed unimpressed with Apple's latest gadgets. The company's stock price fell $3.17 to $503.10 during the event.

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Ortutay reported from New York.

Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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