Apple Inc is set to unveil the fifth iteration of the iPhone on Tuesday after a 15-month hiatus, hoping to fend off hard-charging Android rivals and safeguard its lead in the smartphone market.

The new iPhone comes at a critical juncture as Android phones from Samsung Electronics and other competitors close in on Apple's lead.

Android phones now collectively hold more than four-fifths of the U.S. market, a mere three years after Google Inc launched the mobile software.

Newly appointed Apple CEO Tim Cook will unwrap the new iPhone at corporate headquarters, running the first major product launch in years without Chairman Steve Jobs. Apple stock was up 1.7 percent just ahead of the event.

The iPhone 5, which is expected to be faster, thinner and have a larger screen, arrives just in time for the crucial holiday shopping season.

It is expected to be loaded with the updated iOS5 software that Apple unveiled in June. Some of the new features include improved notification functions and better Twitter integration.

We expect improved processing power and camera capabilities, with a potential bump in RAM, though that may not be needed with iCloud, said William Power, analyst with Baird Equity Research.

Various sources have suggested that Apple will debut more robust voice control functionality, he added.


Apple faces the challenge of sustaining the popularity of its current iPhone 4, more than a year old. Apple sold more than 20 million units in the third quarter ended June 25.

Nielsen data shows the iPhone was No. 2 in the United States with a 28 percent market share -- slightly more than half Android's 43 percent.

Globally, according to IHS iSuppli, iPhone shipments climbed 9.1 percent in the second quarter while Nokia's plummeted more than 30 percent, handing the top spot to Apple with a market share of 18.4 percent.

But Samsung, whose shipments grew even faster, is coming on strong with a global market share of 17.8 percent.

Some on Wall Street also expect Apple to unveil a cheaper phone for the fast-growing Asian market, one of the areas where Apple can accelerate its growth.

Others expect a cameo appearance by Jobs, though a no-show would not be a major disappointment.

For a graph showing Apple's share price since Jobs stepped down, click on:

The iPhone 4 pricing starts at $199 and is available on the networks of AT&T Inc and Verizon Wireless, a venture of Verizon Communications Inc and Vodafone Group Plc. Many analysts expect Sprint will become the third U.S. operator to sell the iPhone when the next version is launched. [ID:nN1E7921JD]

Apple launches are some of the hottest events on the tech calendar, scrutinized by fans, investors, the media and industry insiders alike. Tuesday's Let's talk iPhone show, starting at 1 pm Eastern time, will mark Cook's unofficial debut since taking over from co-founder Jobs in August.

(Editing by Edwin Chan, Richard Chang and Ted Kerr)