After much chatter about iPod Touches, Phil Schiller, Apple's senior vice president of worldwide product marketing, teased the crowd with the iPhone 4S.
The handset features the same design as the existing iPhone 4, but this device is obviously different under the hood, with the new processor and other perks. It comes in white and black.
Made by Samsung, the A5 processor is a dual-core chip that should help the iPhone keep pace with dual-core Android phones from Samsung, HTC and Motorola.
Packed in iOS 5's 200 new features is the Notification Center, which lets users view and manage notifications in one place without interruption, and iMessage, a messaging service that lets users send text messages, photos and videos between all iOS 5 users. iOS 5 will eventually be available as a free software update for iPhone 4 and iPhone 3GS customers.
iPhone 4S works with iCloud, which includes iTunes in the Cloud, Photo Stream and Documents in the Cloud. These apps automatically store iPhone 4S users' content on the Web and push it to all of a user's other Apple devices. When content changes on one device, all of the other Apple devices are updated over the air.
The new and improve camera promises crisper, brighter pictures, thanks to the 8 megapixel sensor. Most high-end Android phones have 8 megapixel cameras.
Video recording with the iPhone 4S is in 1080p, also keeping pace with existing Android phones.
Apple is finally leveraging the assets from its Siri purchase in April 2010 to add a virtual personal assistant to iPhone 4S, which allow people to ask the phone questions and receive intelligent, well-crafted answers to such queries as "what is the weather like in San Francisco?" The device will also help users make calls, send text messages or email, schedule meetings and reminders, etc. Like Google Voice Actions, but smarter.
Pricing for the iPhone remains as simple and clean as ever. The cheaper legacy models should easily win Apple new customers.
While the Oct. 14 launch of the new smartphone will be limited to a handful of countries, the iPhone 4S will roll out to the rest of the world Apple serves Dec. 1.