Apple shares fell 2.63 per cent to USD 105.50 in early afternoon trades on the Nasdaq Exchange in New York. The stock price gave the California-based company a market-topping value of USD 572 billion.
The flagship devices with boosted memory capacity will be sold at roughly the same price as the models they replace.
But gone is the traditional headphone jack, requiring audio to be delivered via Apple's proprietary "lightning" connector or by wireless -- and that may irk iPhone users with a fondness for wired headsets.
The new-generation iPhones and a second-generation Apple Watch unveiled at the event boast the ability to get wet without getting ruined.
The new smartphones come with Apple seeking to reverse declines in sales of the iPhone in an increasingly saturated global market, and boost its Apple Watch.
While Apple has touted total iPhone sales of one billion, the number sold in the quarter ending June 25 fell 15 percent from a year earlier, highlighting concerns over growth for the key profit driver.
Apple is fielding new iPhones and the Apple Watch Series 2 on the cusp of the crucial year-end holiday shopping season. Major rival Samsung has been thrown off stride by exploding batteries that prompted a recall of freshly-launched Galaxy Note 7 big-screen smartphones.
"While expectation had been low heading into the event, excitement appears to be quickly growing and we believe this could be the most significant upgrade in the phone's history," the brokerage firm Stifel said in a note to investors on Apple.
Analyst Ian Fogg at IHS Technology saw "courageous risks" in the iPhone 7 design, with it looking similar to its predecessor; reserving the best camera for the large-screen version; abandoning the traditional earphone jack, and having to live up to expectations regarding water resistance.
Some analysts saw the iPhone 7 as setting a stage for a major smartphone redesign next year to mark the 10th anniversary of Apple's flagship product. (AFP)