Apple released a smaller iPhone priced at $399, cutting the starting price for the company's smartphone line in a move to broaden its appeal to budget-conscious customers as the coronavirus hobbles the global economy.
The lower-cost model could also attract more consumers to Apple services, a growing driver of revenue.
Shares of Apple fell 1.4%, less than the 2.8% decline of the S&P 500 index.
Apple will start taking orders for the phone on its website on Friday, with delivery of devices expected to start April 24.
The iPhone SE will start at $50 less than what was previously the cheapest iPhone available, the iPhone 8, which will be retired.
The SE comes with a 4.7-inch display and the same processor chip as Apple's most advanced phone, the 11 Pro.
The SE lacks Apple's facial recognition system to unlock the device, instead relying on a fingerprint sensor similar to older models. While the new iPhone adds features such as wireless charging and a high-end camera, it lacks connectivity for 5G, the next generation of mobile data networks.
The announcement comes as the US and much of the world is reeling from the coronavirus, although US political leaders have begun to talk about ending stay-at-home orders and restarting the economy, hoping record deaths and falling hospitalisations represent a peak.
Previous iPhones have been unveiled in a polished presentation in front of fans, but large events remain banned in Apple's home base of Santa Clara County, California, where public officials ordered the first lockdowns in the US to slow the spread of the coronavirus.