Aside from some new color choices -- silver-and-white and gold-and-white combos to join the existing all-white or all-black phone -- the biggest new item on the iPhone 5S is a fingerprint scanner built into the home button.
What Apple is calling Touch ID will allow users to log into their phone using the home button and securely make purchases from iTunes.
A significant feature of the iPhone 5S is its A7 processor, which Apple said will give the iPhone 5S twice as fast CPU and graphics performance as the A6 processor in the iPhone 5 provided.
As expected, Apple also took the opportunity to introduce a less expensive phone, the iPhone 5C, with a number of cost-saving measures, most prominently an all-plastic case.
"Business has become so large that this year we are going to replace the iPhone 5 and we're going to replace it with not one, but two new designs," Apple head Tim Cook said at the presentation. "This allows us to serve even more customers."
The iPhone 5C will come in a variety of bright, neon-like colors and will sell for as little as $99 for a 16GB version, and $199 for one with 32GB of storage -- each with a two-year mobile contract.
In comparison, the iPhone 5S will sell for $199 for a 16GB version, $299 for a 32GB model and $399 for the top-end 64GB phone.
Both versions will go on sale Sept. 20, Apple announced.
2014: The Year in Music [PHOTOS]