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Why Apple Went Small With The New iPhone SE, iPad Pro

This article is more than 8 years old.

What do the new iPhone SE and iPad Pro have in common? Check out their size.

On Monday, Apple announced new versions of its popular phones and tablets. But instead of going larger, Apple went smaller. The iPhone SE is a 4-inch iPhone with updated specs, while the new 9.7-inch iPad Pro takes the more powerful model and shrinks it down to the size of the first iPad.

This downsizing event went against Apple's recent trend of bigger being better. Apple had massive success with the iPhone 6 and iPhone 6 Plus, which accelerated growth when they were released in 2014. Customers (especially in China) loved the new 4.7-inch and 5.5-inch screens. Holiday performance two years ago was spectacular: a record 74.5 million iPhones sold for a record quarterly revenue of $74.6 billion and record quarterly net profit of $18 billion.

And the original iPad Pro, released last year, was a modest hit at the 12.9-inch size. Many professionals liked the larger screen for multi-tasking, and designers and artists could use the new Apple Pencil with the iPad Pro as a drawing canvas.

(Read more: All The News From Apple's iPhone Event)

So why doesn't Apple keep going bigger? The answer may be that the boost from larger screens has ebbed. Sales of the most recent iPhone 6s and 6s Plus, at the same sizes as the prior model, were basically flat, up less than 2% from the year prior. Apple didn’t even list the number of iPhones sold in its earnings report press release, because a record of 74.8 million doesn’t sound great when it means growth year over year is just 0.4%–the slowest rate since the iPhone was introduced in 2007.

Instead, Apple created holes in their lineup for smaller devices. With so much emphasis on the larger iPhones, the 5s had lagged behind. Even as Apple continued to sell the phone, its performance was more than two years out of date. That means many people who like the smaller form factor better than the larger "phablets" had little reason to upgrade. And that contingent of holdouts may be larger than you think. At the event, Apple said that it sold more than 30 million 4-inch iPhones (presumably mostly the 5s) in 2015.

“Today we welcome a new member to the iPhone family,” Apple CEO Tim Cook said. “Many customers have asked for this and we think they’re going to love it.”

Apple tried to fill those holes on Monday. The new iPhone SE has the same A9 processor as the iPhone 6S, which should make it much faster than the old iPhone 5s. The camera is also improved to 12 megapixels, up from 8. Customers who want the 4-inch device now won't miss out on heavily-promoted features like Siri hands-free search and Live Photos. The new iPad Pro also brings advanced performance to a group of customers who wanted a smaller or cheaper product.

Overall, Apple has reached massive revenue from its hardware sales, but the company must look for marginal growth anywhere it can get it. That opportunity used to be on the large screen size, but now the pendulum has swung back around so smaller and less expensive devices are getting some love. It will be interesting to see if Apple's moves pay off in a meaningful way.

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