Apple has introduced a new bigger iPhone for the first time, called the iPhone 6 Plus.
At an event in California, CEO Tim Cook said: "Today we're launching the biggest advancement in the history of iPhone."
The new iPhone 6 Plus comes with a 5.5-inch screen, compared to the four-inch screen of the current generation iPhone 5s.
Apple also introduced the iPhone 6, which is also larger, now coming with a 4.7-inch screen. Both devices also have what Apple call "ion-strengthened glass" screens.
The larger of the two new devices, the 6 Plus, also allows for apps such as Messages and Mail to be displayed in landscape orientation for the first time.
The firm also confirmed a new processor chip, the A8, which will be used to power new apps and games, with partnerships with game studios including Disney and EA also confirmed on stage by Apple's Phil Schiller.
The Cupertino-based technology giant had been expected to announce two new iPhones, with speculation and alleged leaks appearing online over the last few weeks.
The new iPhone devices will ship on September 19, with the company's new mobile operating system, iOS 8, becoming available on iPhone 4s and above from September 17.
Mr Schiller confirmed that the new iPhone 6 will be priced at US$199 for the 16GB model, going up to $399 for the 128GB model. The iPhone 6 Plus will start at $299.
Apple has also announced plans to enter the payment market.
“Our vision is to replace the wallet and we’re going to start with payments”, said Mr Cook.
He also called magnetic strips on credit cards “outdated and vulnerable” before introducing Apple’s take on the area.
“We love this kind of problem. This is what Apple does best. We’ve created a new payment process and it’s called Apple Pay,” he added.
The new software uses the fingerprint scanner on your phone and native payment apps to allow users to pay for products by touching their iPhone to payment outlets.
It uses near-field communication (NFC) technology, used in existing contactless payments, and the company’s own Passbook app to secure your details.
The Find My iPhone app would be used to track and suspend your account if the device is stolen.
“We are not in the business of collecting your data”, said Apple, confirming that all Apple Pay transactions are not logged by the company.
Major retailers have already signed up to use Apple Pay in their stores, including Toys R US and Staples.
Online, it is also possible to pay within some apps. For now, the technology is just been introduced in the US.