Apple juices up iPhones, adds colors

• Colorful iPhone 5c starts at %2499 with a contract%3B %24549 without contract
• Apple stock falters more than 2%25 on the news
• New flagship iPhone 5s includes fingerprint recognition

SAN FRANCISCO — Hoping to take another big bite out of the smartphone market, Apple on Tuesday unveiled its next-generation iPhone 5s, a new iPhone 5c in several colors, starting at $99, and the latest version of its iOS 7 operating system.

Apple marketing chief Phil Schiller showed green, white, blue, pink, and yellow iPhone 5c models at its Cupertino headquarters. The new phone casings are made of a polycarbonate plastic.

The new 5c will cost $99 for a 16-gigabyte version and $199 for a 32-GB model with a wireless service contract. It will be powered by Apple's A6 processor and sport an 8-megapixel camera. The 5c gets Apple's 4-inch retina display and can run on 4G LTE networks.

Apple's dual phone attack will allow it to "serve even more customers," said Schiller on stage.

But the colorful iPhone 5c addition to its lineup will run $549 for a model purchased without a carrier plan, a price some may see as relatively high, points out Gartner analyst Van Baker.

Shares of Apple closed down 2.3% to $494.64 following the news.

"The price is a little more than was hoped for," says Baker.

Apple's Schiller also took the wraps off the iPhone 5s, calling it the new "gold standard" in phones. Apple's latest will be a 64-bit model powered by a zippier A7 chip and come in a new gold option in addition to silver, and a "space gray" in place of black. Apple's marketing chief says the processor is twice as fast as its predecessor.

Apple's yearly iPhone refresh — this one expected to pack some wow with color models — drew tech celebrities to the event: Yahoo CEO Marissa Mayer, Square and Twitter founder Jack Dorsey as well as former vice president Al Gore, who sits on Apple's board.

Apple also included a much-expected fingerprint ID sensor in its home button, allowing people to unlock the phone, as well as make iTunes purchases.

"The fingerprint reader and 64-bit chip set the (5s) apart from the competition," says Creative Strategies analyst Tim Bajarin.

IPhone 5s prices will run $199 for a 16-GB model, $299 for a 32-GB and $399 for a 64-GB version — all requiring a two-year contract.

The 5c will be available for pre-order on Friday for delivery by Sept. 20. The 5s will be available starting Sept. 20, with no pre-order option.

Also new: IPhone 5s has a motion chip, called M7, which will send data from sensors to apps, which could mark its first step to wearable computing. The new M7 chip can sense if its user is walking, running, driving or stationary. Such capabilities pave the way for new health and fitness apps.

Camera advances come to the iPhone 5s, as well. The 8-megapixels stays the same but the unit will feature a larger sensor capable of better results in low light. The A7 chip will deliver faster auto focus and picture capture, as well as provide image and video stabilization.

"I think the 5s will do extremely well. The question mark is how well the 5c will do and sell at that price point," says Baker.

This fall is shaping up as a crucial season for smartphone makers. Apple is up against top Android phones from Samsung, HTC, Sony and LG, not to mention the new Moto X from Google's Motorola unit and Nokia's Lumia 1020 Windows Phone.

"I think our product compares very, very well to what I've seen so far in Apple's announcement," Google Executive Chairman Eric Schmidt told USA TODAY. "Our phones just do extremely well against theirs right now."

Phones in distinctive colors and styles are a big part of the competitive push this year. Moto X buyers on AT&T now can customize the look of the handset via the Moto Maker feature, and HTC just rolled out a metallic blue HTC One that is available exclusively at Best Buy.

Apple will reach its 700 millionth shipment of iOS devices by next month. Google recently passed 1 billion Android activations.

"The 5s is a really nice phone. They seem really confident that the fingerprint technology will work. If they can do that and have it work effectively, it is a really nice improvement to the pass code," says Baker.

With its one-time iron-clad grip on the smartphone market under pressure, Apple is banking on a new hit. Its market share fell again in the second quarter — to 14.2%, from 18.8% the year before, according to a recent report from researcher Gartner.

Apple sold more phones in the quarter — 31.9 million, up from 28.9 million a year ago — but there's a huge gap between Apple and No. 1-ranked Samsung, which sold 71.4 million smartphones, up from 45.6 million.

"We think the 5s will solidify (Apple's) leadership on the high end, and the 5c will lead (Apple) to improved market share," says S&P Capital IQ analyst Scott Kessler.

Apple also took the final wraps off its latest version of iOS 7, to be released Sept. 18. The new operating system takes a stripped-down approach to the look and feel of the software. The new iOS 7 gives recommendations for commute planning much in the way Google Now does.

Along with the launch of iOS 7 comes the availability of Apple's previously announced iTunes Radio streaming music service.

Also, iWorks will become a free app available on new iOS devices, offering creation of documents, spreadsheets and presentations.

Siri now comes in male and female voice options. The voice assistant has added new features, such as the ability to return Tweets among queries.

Contributing: Rick Jervis in Fort Worth.