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

The company's shares rose nearly 2 percent to $100.22 in heavy trading.

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

The iPhone 6 is expected to be available with a 5.5-inch or 4.7-inch screen, a step up from the current models' 4 inches. It may also boast extra-tough screens made from scratch-resistant sapphire material.

Fans of the iPhone are already lining up outside the Apple store on New York's Fifth Avenue to be among the first to get their hands on the new device, even though the phones typically arrive in stores around 10 days after their launch.

Cowen & Co analysts said they expected Apple to price its top-end iPhone at $499 and to reduce the price of its existing models.

Apple has 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.

It might also finally be showtime for Apple's smartwatch, or iWatch -- the company's first new device since the iPad in 2010 and the first to be launched by Tim Cook since he became chief executive in 2011.

Apple has hired renowned industrial designer Marc Newson to work with Jonathan Ive in its design team. Newson, who has designed products from aircraft to watches, has been called "arguably the most influential industrial designer of his generation" by the New York Times.

The company 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 its 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.

The Cowen & Co analysts 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."

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