Apple shares dropped more than four percent on Wall Street on Tuesday as the California gadget-maker unveiled an updated version of the iPhone but not a new model, as many had been expecting.
Apple's new chief executive Tim Cook, who replaced ailing founder Steve Jobs in August, presided over the launch of the iPhone 4S at Apple headquarters in Cupertino, California.
The iPhone 4S features a speedier processor, a built-in "personal assistant" that responds to voice commands and a more powerful camera, but it was not the revamped next-generation iPhone 5 smartphone many Apple fans had hoped for.
The iPhone 4S will be available in the United States, Australia, Canada, France, Germany, Japan and Britain on October 14 with pre-orders commencing a week earlier.
In the United States, iPhone 4S prices will start at $199 for a 16 gigabyte model and top out at $399 for a model with 64 gigabytes of memory.
The iPhone 4S predecessor will be available for $99 while earlier generation iPhone 3GS models will be free with telecom carrier contracts, an Apple first.
A slick new version of the iOS mobile operating system was shown off at the press event in an intimate theater at Apple's Silicon Valley campus.
Apple also announced the October 12 launch of long-promised iCloud, which lets people store music, pictures, videos and other digital files online and access the content across Apple computers and mobile devices.
"IPhone 4S plus iOS 5 plus iCloud is a breakthrough combination that makes the iPhone 4S the best iPhone ever," said Apple senior vice president of worldwide marketing Philip Schiller.
"While our competitors try to imitate iPhone with a checklist of features, only iPhone can deliver these breakthrough innovations that work seamlessly together," he said.
The iPhone 4S will be rolled out by the end of October in 22 additional countries including Austria, Italy, Singapore, Spain, and Switzerland.
Apple also added new features and pricing to its iPod Touch and iPod Nano devices in the latest improvements to a line kicked off with the introduction of the first iPod in the same Apple "Town Hall" in 2001.
The iPod Touch will be available for $199, and iPod Nano prices will start at $129.
"IPod has revolutionized the way we listen to music and with over 320 million sold is the worlds most popular music player," Schiller said.
He boasted that the touch model that is essentially an iPhone without the mobile phone service was the best selling iPod ever.
Cook appeared relaxed and confident as he filled the shoes of legendary pitchman Jobs, who underwent an operation for pancreatic cancer in 2004 and a liver transplant in 2009.
Jobs, 56, did not make an appearance at Tuesday's event. He remains with Apple as chairman of the board of directors.