Apple iPhone 5C Launched In California

By Mark Stone, China Correspondent

Apple has revamped the iPhone by launching two new handsets at its California headquarters - including one that has a fingerprint reader.

The California launch was streamed to a parallel event in Berlin last night and played at another launch in the Chinese capital Beijing this morning.

The firm's chief Tim Cook confirmed rumours that the high-end iPhone 5S would be equipped with a fingerprint scanner to unlock the device and put an end to the days of passwords.

He promised the cheaper iPhone 5C would come with "all the great technology that customers have loved" on its previous models - but analysts said it was "nowhere near" as cheap as some had predicted.

The "budget" version - launched at a time when Apple arguably faces stiffer global competition than ever - will be an obvious rival to some of the low-cost gadgets sold by the firm's major competitors.

The iPhone 5C costs $99 (£63) over a two-year contract, or $736 (£469) as a one-off payment.

However winning over the Chinese consumer is, according to analysts, key to Apple's continued success.

The 5C, with its bright colours and lower price tag, is designed to attract buyers in China who currently favour cheaper android smartphones.

However, it is still far more pricey than alternative models. The iPhone 5S in China will cost 5,288 RMB (£549) according to Apple's China website.

Initial polls suggest that means the battle in China isn't won.

The iPhone 5C

In a survey on Sina.com.cn, a Chinese web provider similar to Yahoo!, 88.4% of those polled said the price for the iPhone 5C was too high. Only 2.6% said they would buy one.

The new flagship mobile, the iPhone 5S - dubbed the "gold standard in smartphones" by the tech giant - will come in the traditional Apple colours of silver and slate grey as well as a new golden hue.

But the 5C is billed as "more fun" than any iPhone yet. It will be plastic and come in a range of five vivid colours - blue, white, pink, yellow and green.

For young Chinese consumers who seem to buy increasingly gaudy plastic covers for their phones, this should be attractive.

However, Apple still faces one considerable problem in China. It currently only has a deal with two out of the three Chinese mobile networks.

The company has, so far, failed to sign a deal with China's largest mobile network, China Mobile.

With 745 million customers in China, it is the world's largest mobile communications provider and yet none of those customers can use an iPhone.

A deal is rumoured to be very close, but until it comes, Apple's growth in China will remain limited.

Tein Hee, from Stuff.tv in Singapore, told Sky News: "The iPhone 5C was not what most of us expected. Believed to be an affordable alternative to the iPhone 5S, its price tag for the 16GB version is even more expensive than Nokia's Lumia 925.

Apple CEO Tim Cook confirmed the 'colourful iPhone' rumours

"Apple's greatest contender for the Chinese market isn't its bitter rival, Samsung, or other Android makers. It's China's homegrown brand Xiaomi, which has gained a cult status akin to Apple's, that will put up a strong fight against the Cupertino-based company.

"Just last week, it has also unveiled the Mi3, which costs a mere RMB 1,999 and features hardware and sleek aesthetics that will put the iPhone 5C to shame."

The two new devices were finally shown to the world after a series of images leaked online claimed to show the 5S while the web was awash with speculation that Apple would also branch out with a budget device.

Mr Cook raised a laugh as he told the audience: "A couple of you may have been expecting this."

He added: "The business has become so large that this year we are going to replace the iPhone 5, and we are going to replace it with not one but two new designs.

"This allows us to serve even more customers."

Apple's marketing chief Phil Schiller revealed the phone's US price plans

Apple marketing executive Philip Schiller told the audience: "iPhone 5S is the most forward-thinking smartphone in the world, delivering desktop class architecture in the palm of your hand."

He received a massive round of applause as he introduced the fingertip scanner - named Touch ID - which, he said, would provide a "simple and secure way to unlock your phone with just a touch of your finger".

The security feature is built into the home button and uses a laser cut sapphire crystal along with a sensor to take a high-resolution image of a user's fingerprint.

According to Apple, the technology can "intelligently analyse" the print to provide accurate readings from any angle.

All fingerprint information is encrypted and the firm has insisted it will never be stored on Apple servers.

Beyond unlocking the phone, the feature can be used as a secure way to approve purchases from the iTunes Store, App Store or iBooks Store, Apple said.

It has promised customers that all actions on the device would be faster than on previous handsets, from launching apps and editing photos to playing graphic-intensive games.

The phone will be available in the UK for a suggested retail price of £549 for the 16GB model, £629 for the 32GB model and £709 for the 64GB model.

Investors seemed unimpressed with Apple's latest gadgets. The company's shares closed down $11.53 at $494.64 after briefly surging to $507.45 on anticipation of the launch.

Price correct at 13.58 BST On Wednesday September 11

Jason Jenkins, editor of technology site CNET, said Apple has made a play for the "geeks it lost" to Android with the 5S.

He said: "Android phones like the Samsung Galaxy S4 and HTC One are known for containing very fast processors, while iPhones have been left behind."

:: The market value of FTSE 100 chip designer ARM Holdings jumped in trading on Wednesday on confirmation the 5S would use a 64-bit processor based on the British firm's design.

Analysts expected the A7 processor to result in a higher royalty rate to ARM compared to the current generation 32-bit design.

Shares rose 6% in early trading - adding £600m to ARM's market capitalisation.

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