Apple also customized a sophisticated mapping program, upgraded its voice-activated assistant known as Siri and more tightly integrated Facebook.
Analysts expect Apple to sell tens of millions of iPhone 5 models in coming months.
Morgan Stanley analyst Katy Huberty said Apple may ship between 48 million and 53 million iPhones in the fourth quarter and “up to 266 million” in 2013.
But NPD analyst Stephen Baker cautioned that the key US market has “very different dynamics” than for previous iPhone launches.
“The US smartphone market appears to be an increasingly mature one,” he said.
Baker contended that it would be “more difficult for Apple to easily take share from weakened competitors, because many of the easy share gains have already been accomplished.”
Apple has fierce customer loyalty and has been rapidly gaining users, but has failed to keep pace with smartphones powered by Google’s Android operating system.
Research firm IDC said Apple had 16.9 percent of the global smartphone market, with 68 percent of the market held by makers of Android phones, led by Samsung.
“I think we will see some reaction that Apple didn’t do enough and that some of the features are just catch-up,” Forrester analyst Charles Golvin said after the event.
“But, when you look at the way the whole package is put together in a beautiful, thin, light device, you’ll see that Apple has taken another step.”
An iPhone change with the potential to irk fans is a new “Lightning” connector to replace 30-pin connections, the piece that connects devices to computers, power outlets or docking stations.
Apple will sell adaptors for plugging new generation iPhone and iPod touch devices into accessories already owned, such as stereo speakers or car sound systems.
The change prompted popular wireless headset and speaker maker Jawbone to release a YouTube video showing stereo dock accessories exploding in time with “The Blue Danube Waltz” by Johann Strauss.
“We think the dock is dead,” said Jawbone chief executive Hosain Rahman. “Some people are worried about the connector news making their mobile docks obsolete, but we think docks make your mobile device immobile.”
“The future is wireless,” said the head of the company behind Jambox speakers.
Apple shares, which hit record highs this week and extended the company’s position as the world’s most valuable firm, rose 1.39 percent to $669.79 on the news. Shares inched up to $671.20 in after-hours trades on the Nasdaq.
Ben Reitzes at Barclays said much of the news was already known but added: “We believe today’s announcement marks the beginning of a distinctive holiday season for Apple that blends today’s iPhone launch with the iPad mini launch.”
Apple is widely expected to launch a smaller version of its market-leading iPad tablet computer later this year.
Wednesday’s launch event also unveiled a new lineup of music players including the iPod touch, essentially an iPhone without mobile connections, and the iPod nano.
