iCloud: "Incorrect Apple ID or Password" alert when setting up iCloud after upgrading to iOS 7

When using the iOS 7 setup assistant on your device to set up your iCloud account, you see the alert "Incorrect Apple ID or Password".

Respond to the alert as follows.

If you recently changed your Apple ID and did not update your Apple ID on your device:

  1. Tap Skip This Step to continue.
  2. After completing iOS 7 setup, go to Settings > iCloud.
  3. Scroll down and tap Delete Account, then enter your previous Apple ID and password. 
  4. If your Apple ID or password are not accepted, follow the steps in iOS 7: If you're asked for your previous Apple ID when signing out of iCloud.

If you don't know your Apple ID password:

  1. Tap Forgot Password?
  2. Follow the on-screen instructions.
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