Apple says 2 new iPhone models coming this year, updates to iOS

New feature brings fingerprint scanning to phone

CUPERTINO, Calif. (AP) - Apple says it is planning to release two new iPhone designs later this year so it can serve more customers.

The iPhone 5C, which will be available in five colors -- green, blue, yellow, pink and white. CEO Tim Cook calls it "more fun and colorful" than any other iPhone. The 5C has a 4-inch Retina display and is powered by Apple's A6 chip. It also has an 8 megapixel camera, live photo filters and a rear cover that lights up.

The iPhone 5C will cost $99 for a 16 gigabyte model and $199 for a 32 gigabyte model with a two-year wireless contract.

The iPhone 5S will be offered in three colors, white, champagne, and space grey. In addition to faster systems and an improved camera, the iPhone 5S will include a fingerprint scanner built in to the home button on the front of the device.

The iPhone 5S will cost $199 for a 16 gigabyte model, $299 for a 32 gigabyte model and $399 for a 64 gigabyte model with a two-year wireless contract.

Sales of the iPhone 5, launched just last year, will end with the launch of the iPhone 5S & 5C models. The iPhone 4S, which has been on the market for two years, will now be offered for free with a two-year wireless contract.

Apple unveiled the new designs at an event at its Cupertino, Calif., headquarters. The move comes as rival phones from Samsung and other manufacturers are challenging Apple's hold on the smartphone market.

Apple also announced that its next mobile operating system, iOS 7, will be available as a free download on Sept 18. It can be downloaded on the iPhone 4 and later models, as well as on the tablets beginning with the iPad 2.

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