The iPhone SE will fit easier in the pocket - and be easier on the wallet. With both selling points, Apple hopes to win over new customers and bring back old ones, and it hopes to kickstart upgrade cycles.
Apple announced the latest addition to its iPhone family on Monday, at an event staged at the company's headquarters in Cupertino, California.
The newcomer, dubbed the iPhone SE, aims to be more affordable and portable than other iPhone models currently being produced. It features a four-inch screen and will be priced at $399. In comparison, the screen of a standard iPhone 6s measures at 4.7" (cm) with a cost beginning at $649.
"Some people asked us, pleaded with us to keep the four-inch iPhone in our lineup," Apple Vice President Greg Joswiak said at the event. "They want the most compact iPhone design."
Apple hopes the new model can rope in first-time iPhone buyers and convince owners of the older iPhone 5S and 5C - who may have been reluctant to purchase a larger model - to upgrade.
The company is also taking a similar tactic with its iPad line of tablets. It announced that a new model - the iPad Pro - will have a 9.7" display (compared with the 12.9" standard model). It will cost $599, compared to the standard model's price tag of around $800.
"Apple's announcements today are best seen as attempts to kickstart the upgrade cycles," said Jan Dawson at Jackdaw Research.
He added that the pricing "doesn't get the iPhone down to the kind of level needed to really spur sales in emerging markets."
An "obligation" to protect privacy
Cook also dug in his heels the day before a court hearing with the US government over the company's controversial policy towards encryption.
"We believe strongly we have an obligation to help protect your data and your privacy," Cook told the crowd at the event.
The FBI has asked Apple to unlock for investigation the iPhone of a shooter who killed scores at a community center in San Bernadino, California, last December. Apple has refused - and is backed by the likes of Google and Facebook - arguing that allowing "back doors" to its products would pose a general threat to personal privacy.
The showdown is expected to be bruising and drawn-out, potentially making is way up to the US Supreme Court.
jtm/hg (AFP, dpa)