Apple set to unveil smartwatch, bigger iPhone

Apple Inc is expected to unveil a smartwatch, its first new device in four years, in a gala event on Tuesday that may also mark its long-awaited entry into the mobile payments sphere and deliver a larger iPhone.

Shares of the company rose more than 1 percent to $99.44 in heavy trading.

The iPhone 6 will be available with 5.5-inch or 4.7-inch screens, a step up from the current models' 4-inch screens, and may boast extra-tough screens made from scratch-resistant sapphire material.

Analysts said the new iPhones were likely to help Apple to gain market share against mobiles running Google Inc's Android platform by offering something that Apple previously lacked - larger screens.

Apple has also struck deals with credit card providers such as Visa Inc and MasterCard Inc, the Wall Street Journal reported last week, allowing consumers to use the mobile payment feature of their gadgets for shopping.

After several years of rumors, it might also finally be show time for Apple's smartwatch, or iWatch.

Apple has invited top fashion editors and bloggers in unprecedented numbers to its launch gala as it tries to forge closer ties to the fashion world that may prove crucial to the success of a wearable device.

Bernstein Research analyst Toni Sacconaghi estimated that, if Apple were to sell 30 million iWatches at $250 each, it would add about $7.5 billion to the company's revenue.

Rival electronics giants such as Sony Corp, Samsung Electronics Co Ltd, LG Electronics Inc and Qualcomm Inc have already launched smartwatches, albeit without much success.

A smartwatch would be Apple's first new device launch since it unveiled the iPad in 2010, and also the first brand new product launched by Tim Cook since he became chief executive in 2011.

Cowen & Co analysts said many of Apple's 300 million-plus iPhone users would want a larger screen, and estimated that Apple could sell 15 million to 20 million iWatches in 2015.

Cook, who opened a Twitter account last year on the same day that Apple launched its 5S and 5C smartphones, trumpeted Tuesday's event with an early morning tweet: "Looking forward to a great day in Cupertino! Join us at 10am Pacific."

Additional reporting by Soham Chatterjee and Lehar Maan in Bangalore and Edwin Chan in San Francisco