Apple Inc. announced two new iPhones including one with lower prices and more color options, in a strategy shift by Chief Executive Officer Tim Cook to reach a broader range of customers around the world.
A new iPhone known as the iPhone 5C will start at $99 with a two-year contract and will come in five colors, Apple said today at an event at its headquarters in Cupertino, California. The high-end model called the iPhone 5S will come in three colors including gold.
“The business has become so large,” Cook said. “We’re going to replace it with not one, but two new designs.”
The product introductions underline how Apple, which was a trailblazer when it debuted the iPhone in 2007, is now increasingly following the strategy of other smartphone makers that offer handsets in different colors and prices. Until now, Apple only released one new iPhone model every year. Now as competing devices running Google Inc.’s Android software gain in popularity in the $280 billion smartphone market, Apple is expanding its iPhone lineup to reach more customers.
“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, an analyst with Enders Analysis in London.
Each iPhone unveiling is critical for Apple because the handset accounts for about half its revenue. Rivals including Samsung Electronics Co. using Android software have taken market share by offering more handsets in varying styles and prices. IPhone sales trailed the overall smartphone market in the last two quarters.
Apple is responding with the new iPhones, which made their debut in front of a crowd that included Apple board member and former Vice President Al Gore and Twitter Inc. co-founder Jack Dorsey. The iPhone 5C, which has a plastic casing and a 4-inch screen, will come in blue, green, red, yellow and white. The iPhone 5S will come in white, black and gold.
Apple also revamped its mobile software with the introduction of iOS 7, which will be available for free starting Sept. 18. The overhaul includes new sounds, picture-sharing features, and an iTunes radio feature.
At the event, the company said 700 million iOS devices would be sold by next month. Apple added that its Siri digital assistant is “massively improved” and now draws information from Twitter and Wikipedia, among other things.
Apple also is close to adding two of the world’s largest wireless carriers to sell the iPhone, giving it access to hundreds of millions of new customers. The company is near deals with China Mobile Ltd., the world’s largest carrier, and Japan’s NTT DoCoMo Inc., people familiar with the plans have said.
More new Apple products are expected this year in the run- up to the holiday shopping season. The company is expected to introduce new iPads later this year, people familiar with the plans have said.
Apple shares fell less than 1 percent to $502.35 at 1:39 p.m. in New York today.