Apple has unveiled a redesign of its popular iPhone handset.
The revamped gadget has a stainless steel case, two cameras, improved display and is 24% thinner than the most recent version.
Apple boss Steve Jobs said the redesign was the "biggest leap" it had taken since the launch of the first iPhone.
But analysts said the phone's popularity could be dented by Apple's strict control over what owners can do with their gadget.
The gadget was revealed during the keynote speech at Apple's Worldwide Developers Conference in San Francisco.
The device will go on sale on 24 June. The US price for the 32GB model is $299 (£206) and $199 (£137) for the 16GB model. Apple said prices might be affected by contract conditions.
Some of the impact of the announcement was lessened because technology blog Gizmodo had published details of a prototype of the phone after one was left in a bar by an Apple employee.
Acknowledging the leak, Mr Jobs said: "Some of you have already seen this."
The new handset includes many features that critics had said were lacking from previous versions.
It now includes two cameras - one on the front and one on the back - and allows people to video-chat, although only when it is connected to wi-fi. It also supports high-definition video.
Other extras added to the phone include a gyroscope which, when coupled with the existing accelerometer and compass, gives it six-axis motion sensing. This allows people to control games and apps by waving the handset.
"These phones are getting more and more intelligent about the world around them," said Mr Jobs.
Apple was forced to ask conference goers to stop using wi-fi to ensure that some demos of new features went smoothly. Mr Jobs said the 570 wi-fi hotspots in the room made it impossible to carry out some demos.
Mr Jobs also ran through changes made to the fourth release of the iPhone operating system, now called iOS. Apple previewed many of these features in April, including the ability to have more than one application running at one time.
Another change adds Bing as a search choice on the phone, although Google remains the default option, with Yahoo already available as a second choice.
According to research firm Gartner, Apple's iPhone now has around 15% of the smartphone market, behind Blackberry and market-leader Symbian.
Google's Android operating system has around 10% followed by Microsoft's Window's mobile with around 7% market share.
Despite Apple's position in the smartphone market, analysts warn of stiffer competition especially from nearby neighbours Google.
"The rise of Google Android over the last two years has been phenomenal and is allowing manufacturers to create appealing alternatives to the iPhone; critically at cheaper prices," said Adam Leach, principal analyst at Ovum.
"These handsets are more than just iPhone clones," he said.
"The risk to Apple is that these devices offer greater freedom with available content and may prove more appealing if it offers the right user and developer experience, than a device with Apple approved content only."