The device is also speedier because of a more powerful processing chip and upgraded wireless technology that accelerates Web surfing.
Apple also has equipped the iPhone 5 with a superior sound system, courtesy of the new headphones that the company says it spent three years developing.
The headphones, called "EarPods," are a vast improvement on the ear buds that Apple has been giving away with its devices for more than a decade.
The new headphones actually stay in your ears and make it seem as if the sound is playing inside your head.
The EarPods come free with the iPhone 5, and they sounded as good as $100 headphones sold by a variety of other companies.