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Apple Introduces Thinner, More Colorful iPhone 5

Apple

Apple iPhone 5
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Apple iPhone 5

on Wednesday lifted the curtain on the eagerly awaited fifth update to its popular iPhone, the latest salvo in the digital wars pitting the technology behemoth against a host of smartphone competitors.

Nearly a year after the death of founder Steve Jobs, Chief Executive Tim Cook took to a San Francisco stage to unveil the new iPhone 5, a slimmer device billed as 20 percent lighter than its predecessor — the company's slimmest yet — with a four-inch display, faster processing time and sharper color resolution.

The new iPhone, for weeks the subject of intense speculation by Apple-watchers, was largely in line with what many bloggers and technophiles had expected. As a result, Apple's shares fell slightly before staging a modest bounce in volatile late afternoon trading. (Read more: iPhone 5 Reactions: The Buzz on Twitter)

The update comes with iOS 6, the sixth iteration of Apple's operating system that also runs on its other digital devices. For the privilege of sporting Apple's new iPhone, consumers will be expected to plunk down $199 for a 16 gigabyte version; $299 for a 32GB, and $399 for a 64GB unit. Those prices will be offered with a 2-year contract with a cell phone provider.

The new device builds on the original by adding a fifth row of application icons, with a longer docking row at the bottom and three microphones. The new iPhone specifications also include an improved camera — an eight megapixel sensor with backside illumination and more rapid ability to capture photos using a panorama function that "sweeps" the scene. (Read more: iPhone 5: What Impressed Wall Street the Most)

With consumers expected to line up to buy Apple's latest innovation, the stakes couldn't be higher. The terrain for consumer electronics is growing fiercely competitive, with rivals looking to chip away at Apple's traditional dominance in the sector.

Smartphones from and Google are emerging as Apple's biggest challengers, both in smartphones and tablets, even as Apple continues to dominate the latter.

Apple also used the new iPhone as a way of introducing consumers to a new dock connector, which it said would eventually make older types obsolete. The new connector plugs in either direction, and is 80 percent smaller than the older version, according to Philip Schiller, Apple's senior vice president of worldwide marketing.

The company is also updating iTunes, its digital download store. The newer version will allow users to share photos from within their iTunes library, includes tour information for artists, and builds in Apple's iCloud service.

By all accounts, Apple is attempting to send a clear message to consumers: thin is in. The new iPhone will be complemented by a suite of new, slimmer iPods, including new Nano and Touch models. A thinner Nano will have features that include a larger display with an FM radio tuner and up to 30 hours of music playback. It will also contain a photo viewer and video capabilities.

Meanwhile, a slimmed-down Touch will get a dual-core processing upgrade and a photo editing functions – a significant departure from the earlier model. It will also take 5 megapixels photos, and will share many of the iPhone 5’s features. Apple is also introducing “EarPods”, new earbuds that it spent three years designing.

Contrary to rumors that ran rampant several weeks ago, the company did not introduce a rumored mini-iPad tablet device. Nonetheless, Cook used the opportunity to boast that the wildly popular iPad's market share had grown to 68 percent, saying "I don't know what these other tablets are doing." (Read more: Is This What The iPad Mini Will Look Like?)

-- Jon Fortt contributed to this report from San Francisco.

email: tech@cnbc.com

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