Apple goes small for new iPhone, iPad aimed at first-time buyers and customers in emerging markets

Apple on Monday unveiled a new iPhone with a four-inch screen, aiming to reach consumers looking for a handset that is more affordable and compact than its flagship models.

The new device — called the iPhone SE — will debut at $399 for US customers without a contract subsidy, in a significant cut from the price of its larger iPhones.

Apple vice president Greg Joswiak said many consumers prefer smaller handsets, which accounted for 30 million iPhones sold in 2015.

“They want the most compact iPhone design,” he told an Apple event in Cupertino, California.

“Some people asked us, pleaded with us to keep the four-inch iPhone in our lineup.”

The iPhone SE will be aimed at first-time Apple buyers and those who want to upgrade from the iPhone 5S and 5C, which have not been updated in over two years.

The iPhone 6S, the lowest-cost handset in the large-screen family, starts at $649.

Apple will be taking orders Thursday for the new phone, with deliveries set for March 31, in the United States, Britain, Australia, Canada, China, France, Germany, Hong Kong, Japan, New Zealand and Singapore, with more markets to come online in April.

Also unveiled at the event was a new iPad Pro that also moves smaller — a 9.7 inch display compared with the 12.9 inch model on the original business-geared tablet.

“It is a large enough display to get all your work done, but easy to carry around,” said Apple vice president Phil Schiller.

The smaller, new iPad starts at $599 for US customers, down from around $800 for the original.

“Apple’s announcements today are best seen as attempts to kickstart the upgrade cycles for both iPhones and iPads,” said Jan Dawson at Jackdaw Research.

“Larger iPhones are still selling in huge volumes, but there’s considerable evidence that some of those who own smaller iPhones are holding onto them rather than upgrading to the new, larger iPhones.”

Dawson said he sees “significant pent-up demand within Apple’s base of iPhone owners who want a smaller iPhone with up-to-date specs and newer features.”

But he added that “this pricing doesn’t get the iPhone down to the kind of prices needed to really spur sales in emerging markets, where older devices have been on sale for some time at similar or lower prices.”