CUPERTINO, CA (CNN) - The new iPhone will come in two sizes, and will have retina display.
Phil Schiller introduced the new product which will be the iPhone 6 and the iPhone 6 Plus.
And although the crowd is cheering the version, there's a cloud overshadowing over what's supposed to be Apple's most heralded moment in years.
CEO Tim Cook is announcing the brand new item Tuesday, something that has not happened since the release of the iPad back in 2010.
However, last week's hack of Apple's iCloud and the release of naked celebrity photos has undermined what was meant to be Cook's long-awaited moment in the sun.
Security concerns couldn't come at a worse time, according to analysts, as many predict Apple is also about to launch a mobile payment system.
"The recent snafu with iCloud and celebrity photos being put all over the web, you might have some skeptics with saying, 'Hey do I really want to trust Apple with my daily financial transactions if they can't keep Jennifer Lawrence's naked photo from going all over the place?'" said CNN Money correspondent Paula Lamonica.
The news help pushed Apple's stock down nearly 5 percent, wiping more than $25 billion off the company's market value.
Investors are eager for Cook to finally deliver the first brand new device under his helm.
Apple's stock has seen major ups and downs since Steve Jobs' death. The iPhone's market share has declined from 18 to 11 percent with the rise of Google's Android.
On top of that, iPad sales have begun to stall - falling 16 percent year to year.
The clock's been ticking while tech watchers have waited and waited for Apple to deliver its first wearable technology.
Rivals like Samsung leaped ahead with six different smart watches. There are other offerings from starts-ups like Pebble and giants like Motorola.
Now, all expectations are for Apple to finally deliver an iWatch at Tuesday's event, as well as iPhones with larger screens.