iPhone 5S: fingertip scanner is key to new direction

It used to be the ultimate crime scene clue. Now Apple has transformed the fingerprint into a key to unlock the wealth of personal information that is stored on the iPhone.

The company's new flagship 5S model, the more expensive of two 4G handsets unveiled at its headquarters on Tuesday night, goes on sale on 20 September, and will be able to identify its owner by scanning a fingertip.

The fingerprint scanner is built into the home button, protected by a sapphire crystal coating, and uses a low radio frequency signal to map the unique lines of its owner's index finger or thumb. It is able to scan the dermis layer underneath the surface of the skin, avoiding problems caused by damaged or dry fingertips. Without pressing, the owner will be able to unlock their phone with one touch, and once inside the device, a fingerprint will suffice as proof of identity to purchase music, films, books and applications from Apple's stores.

The 5S will cost $649 (£549) without a contract, and also comes with a 10cm (4in) screen and an 8 megapixel camera – the same as the iPhone 5 – with double the processing heft of its predecessor.

As more services move online, and customers collect long lists of passwords to access everything from bank accounts to office files, fingerprint technology could prove a big step in making access to phones and the sensitive information they contain simpler and more secure.

But in an attempt to allay privacy fears, Apple was forced to deny it was creating an archive of biometric information. "All fingerprint information is encrypted and stored securely in the Secure Enclave inside the A7 chip on the iPhone 5s," Apple said in a statement. "It's never stored on Apple servers".

After five years in black and white, the iPhone has burst into colour. With an eye on the lucrative Chinese market, the 5S will now come in a muted gold, as well as silver and grey.

The cheaper 5C, the other device unveiled, was described by Apple's chief designer Sir Jonathan Ive as "beautifully, unapologetically plastic", and will cost $549 (£469) without a contract. The 5C comes with a choice of six back cases in a spectrum ranging from coral pink to yellow. It will have the same screen size as its more expensive stablemate, and will function on most 4G networks.

But there was a surprise at the cost of the 5C. "This is not the cheap product that many expected," said Carolina Milanesi, research vice-president at Gartner.

In front of an audience which included Yahoo's chief executive, Marissa Meyer – who has issued staff with iPhones to ensure they are developing with mobility in mind – Apple's chief executive, Tim Cook, set out to demonstrate the company retains the creative mojo that flourished under Steve Jobs.

The inventions of the Jobs era transformed the music and mobile industries, and are threatening companies such as Dell and Hewlett-Packard as tablets and smartphones begin to replace traditional PCs. But critics have questioned whether under Cook Apple has the ability to repeat the trick. "The competition has caught up and it's now purely about how quickly it can innovate and drive its own experience forward," said Benedict Evans of research firm Enders Analysis.

Apple is expected to sell 170m smartphones in 2013, second only to Samsung. Cook has set his sights on gaining ground in China, where Apple languishes in seventh place behind South Korea's Samsung and five domestic phone makers, some of them little known outside Asia.Crucial to the iPhone's success in Asia its distribution deal with Japan's NTT DoCoMo, but a much rumoured deal with China Mobile was not mentioned during the showcase.

Unusually for a relatively new model, the iPhone 5 has been discontinued; those looking for a more budget handset will have to make do with the 4S, which was first released more than two years ago.