The cheaper 5C, the other device unveiled, was described by Apple`s chief designer Sir Jonathan Ive as "beautifully, unapologetically plastic", and will cost $549 (£469) without a contract.

The 5C comes with a choice of five back cases in a spectrum ranging from coral pink to yellow. It will have the same screen size as its more expensive stablemate, and will function on most 4G networks.

But there was surprise at the cost of the 5C. "This is not the cheap product that many expected," said Carolina Milanesi, research vice-president at Gartner.

In front of an audience which included Yahoo`s chief executive, Marissa Meyer – who has issued staff with iPhones to ensure they are developing with mobility in mind – Apple`s chief executive, Tim Cook, set out to demonstrate the company retains the creative mojo that flourished under Steve Jobs.

The inventions of the Jobs era transformed the music and mobile industries, and are threatening companies such as Dell and Hewlett-Packard as tablets and smartphones begin to replace traditional PCs.

But critics have questioned whether under Cook Apple has the ability to repeat the trick. "The competition has caught up and it`s now purely about how quickly it can innovate and drive its own experience forward," said Benedict Evans of research firm Enders Analysis.

Apple is expected to sell 170m smartphones in 2013, second only to Samsung. Cook has set his sights on gaining ground in China, where Apple languishes in seventh place behind South Korea`s Samsung and five domestic phone makers, some of them little known outside Asia.

Crucial to the iPhone`s success in Asia its distribution deal with Japan`s NTT DoCoMo, but a much rumoured deal with China Mobile was not mentioned during the showcase.

BdST 2114 HRS, SEP 11,m 2013
Edited by: Sabbin hasan, ICT Editor