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(THE WALL STREET JOURNAL) At anevent Mondayat its California headquartersAppleintroduced a smaller iPhone with a 4-inch display, setting the lowest starting price ever for its flagship phone.
Apple said it would start offering the iPhone SE—with a 4-inch display, better camera and capability to use Apple Pay—at $399 with 16 gigabytes of storage. That is roughly $50 less than the current $450 starting price for its existing iPhone 5S.
Apple said the newest iteration of the phone would be “the most powerful 4-inch phone ever,” with an A9 chip and graphics processor that would give it the same processing and graphics performance of its larger iPhone 6S, which made its debut last fall.
“Many, many customers have asked for this,” Chief ExecutiveTim Cooksaid of the upgrade to the smaller phone at the event.
Apple senior vice president of worldwide marketing Phil Schiller announced the new 9.7" iPad pro .PHOTO:JUSTIN SULLIVAN/GETTY IMAGES
The company also unveiled a smaller version of its iPad Pro—a 9.7-inch version that is the size of its main line of iPads. The iPad Pro, with performance designed to bridge the gap between tablet and PC, was announced last fall at 12.7 inches. The smaller version will start at $599 and will begin shipping next week.
“It is the ultimate PC replacement,” said Apple executivePhil Schiller.
The company also announced that it would decrease the price of its Apple Watch to $299, from its previous low of $349.
Mr. Cook kicked off the eventby telling the audience that Apple won’t relent on its stance to keep data on customers’ iPhones secure.
The comments come amid Apple’s escalating legal battle with the U.S. Justice Department over unlocking the phone of a shooter in the fatal San Bernardino, Calif., attack in December.
Lawyers for Apple and the Justice Department will face off Tuesday at a hearing before a federal magistrate in a case testing the boundaries of privacy and security in the smartphone era.
“We need to decide as a nation how much power the government should have over our data and over our privacy,” Mr. Cook said. “We owe it to our customers and we owe it to our country” to protect data.
Most of the event, however, focused on the company’s products. While Apple has reaped great success in the past few years selling larger-display iPhones, the company said some customers prefer the smaller display size, which is especially popular with first-time iPhone users.
Apple introduced the iPhone SE with 4-inch screen Monday.PHOTO:APPLE
Apple is targeting consumers who like the convenience of a smaller phone without the compromises of outdated technology.
The company, which hadn’t updated the iPhone 5S since introducing it in 2013, said it would start accepting orders for the iPhone SE on Thursday, and it will be available from March 31.
The aggressive starting price for the new phone represents a slight deviation from its previous iPhone strategy. In the past, Apple reduced the price of older iPhones, but with the SE, it is introducing a new phone at the price of an older model.
Another interesting aspect of the new device is that Apple has abandoned the convention of numbering its iPhones. The iPhone SE is the first iPhone without a number attached since the original iPhone.
Analysts expect iPhone unit sales to fall 6% in the fiscal year ending in September, according to FactSet. Analysts don’t expect iPhone sales to begin trending upward until a new flagship device comes out this fall.
