For Apple's iPhone SE, new iPad Pro, small is the new big

A more petite iPhone and a new 9.7-inch iPad Pro stretch out Apple's family of products. The goal: to convince you it's time to trade up.

Screenshot by Josh Miller/CNET

You're probably seeing a lot of "size matters" headlines (and jokes) flash across the Web today.

That's because Apple pulled a 180 and, for the first time, introduced a new, smaller phone: the 4-inch, $399 iPhone SE. It also unveiled the smaller iPad Pro, essentially taking the jumbo iPad Pro and shrinking it to normal size. Both go on sale on March 31.

The two products headlined a Monday event at Apple's Cupertino, California, headquarters where CEO Tim Cook referenced its ongoing battle with the FBI over whether it should be compelled to create new software with a so-called security "back door" for its iPhones. The company also cut the starting price of the Apple Watch to $299 and added new bands, and it provided updates to its software.

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Apple executive Greg Joswiak talks up the new iPhone SE.

CNET

Still, the biggest news was Apple's smallest product.

The iPhone SE marks a reversal in the prevailing trend among handset makers who have been supersizing their phones each year. Apple's latest phone is designed to woo those who haven't embraced the larger, 4.7-inch iPhone 6S or who don't have the financial means to buy the most expensive models, which start at $650.

Both the iPhone SE (Apple didn't say what SE stands for) and the revamped iPad follow CEO Tim Cook's strategy of creating products that appeal to people's different preferences in size and price.

"Apple's announcements today are best seen as attempts to kick-start the upgrade cycles for both iPhones and iPads," said Jan Dawson, an analyst at Jackdaw Research.

SE is the new C

The introduction of the 4-inch iPhone SE is the first time since the iPhone debuted in 2007 that Apple will unveil new phones on two occasions in a year. (We expect a higher-end iPhone 7 in the second half -- in September if Apple follows its typical product intro cycle). The iPhone SE is packed with a processor that's twice as fast as 2013's iPhone 5S, a 12-megapixel camera that captures 4K video, and a near-field communications chip that allows for mobile payments through Apple Pay.

It also marks Apple's second attempt to create a more affordable iPhone. The first was the iPhone 5C in 2013. The plastic-encased, colorful phone carried a starting price of $199 and offered a notable step down in build quality and specifications. The "C" quickly became synonymous with "cheap."

The iPhone SE hopes to accomplish what the iPhone 5C did not: win over budget-conscious consumers in fast-growing emerging markets like Brazil or India, and in developed countries like the US, which is starting to see an influx of cheap, but decent, phones. Unlike rival phones, Apple's new iPhone SE isn't exactly a "cheap" iPhone since it's priced higher than most of the affordable competitors.

Apple also hopes the iPhone SE will excite a new segment of consumers at a time when phone fatigue is settling in, meaning they're increasingly content with the device they already own. IDC expects smartphone sales growth to slow to 5.7 percent, down from a 28 percent jump just two years ago.

Even Apple has warned that the iPhone would see it first sales slump in March.

The company is also hoping that customers who shied away from the bigger iPhones will now upgrade to the iPhone SE. "Some people asked us, some people even pleaded with us, please keep the 4-inch products in our lineup," said Greg Joswiak, vice president of Apple iOS product marketing.

It's a new iPad. Will anyone care?

Apple's 12.9-inch iPad Pro, introduced in September, failed to halt a decline in the company's tablet sales. Though the iPad still leads the tablet market, sales tumbled 25 percent in the all-important holiday sales quarter in December, capping two years of declines.

So here comes the 9.7-inch iPad Pro. Like its larger, 12.9-inch sibling, it too can connect to Apple's $149 keyboard and work with the $99 Pencil stylus. The tablet can also connect to a USB camera adapter and SD card reader. As with other Apple mobile devices, the new iPad Pro also has a 12-megapixel camera that can capture 4K video. It starts at $599 and comes with 32 gigabytes of storage. The 128GB model costs $749.

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Apple's smaller iPad Pro works with the Pencil stylus and smaller keyboard accessory.

CNET

It's unclear whether the new features will excite consumers who have found an older tablet is good enough.

"This is a move designed to boost upgrades, as it will be the first really meaningful change in what the 10-inch iPad can do in several years," Dawson said. "But it's also intended to spur new people to buy an iPad to replace or augment a laptop they may have used in the past."

Apple Watch price cut, software updates

A year ago, the Apple Watch was the headline product at the company's event. This year, it was just a sideshow. Cook added a new set of bands and cut the starting price for Apple Watch Sport by $50, from $349.

Apple also said the latest version of its mobile software, iOS 9.3, will be available today. The update includes a feature called Night Shift that changes the color of the screen late at night so you can sleep better.

Apple also updated its Apple TV software to version 9.2, which brings Siri voice search for the app store, voice dictation and Bluetooth support for keyboards. Cook said there are now 5,000 apps available for AppleTV.

Cook kicks off with security promise

Apple's event came just a day before it's set to duke it out with the FBI in a courtroom in Riverside, California.

Cook didn't waste time diving into the issue, leading off with a vow to protect the personal data of his customers. "This is an issue that impacts all of us and we will not shrink from this responsibility," he said.

The FBI says its request for help through new software is a one-time-only request that could yield information on terrorism and potentially save lives. Apple argues that creating software to unlock a single iPhone puts all iPhones at risk, and has spun it into a broader fight for your privacy.

It's a fight that has drawn much of the tech community to its side.

"We need to decide as a nation how much power the government should have over our data and our privacy," Cook said.

See all of the news from Apple's March 21 event.

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