Apple releases economical iPhone SE priced at $399 as coronavirus stalls economy

Wednesday out a smaller iPhone valued at $399, cutting the starting price for the company's smartphone line in a move to broaden its appeal to budget-conscious clients as the coronavirus hobbles the worldwide economy.

The lower-cost model could also appeal more customers to Apple services, a growing driver of income. Shares of Apple fell 1.1%, less than the 2.8% decline of the S&P 500 index.

The iPhone SE, obtainable April 24, is the second generation of a earlier value model. It will start at $50 less than what was formerly the cheapest iPhone available, the $449 iPhone 8, which will be retired. The SE comes with a 4.7-inch display and the similar processor chip as Apple's most advanced mobile, the 11 Pro. The SE lacks 5G ability and Apple's facial recognition system to unlock the device, instead relying on a fingerprint sensor alike to older models.

The statement comes as the United States and much of the world is reeling from the novel coronavirus, although U.S. political leaders have started to talk about ending stay-at-home orders and resuming the economy, hoping record deaths and falling hospitalizations represent a peak.

Every earlier iPhone has been revealed in a polished presentation in front of followers, but large events remain banned in Apple's home base of Santa Clara County, California, where community officials ordered the first lockdowns in the United States to slow the spread of the novel coronavirus.

Apple's inexpensive phone reflects the coronavirus-driven economic downturn and job loss.

The economy phone enters a cut-throat market for value phones, particularly in China, where Apple derives about 17% of sales. While the new iPhone adds features such as wireless charging and a high-end camera, it lacks connectivity for 5G, the next generation of phone data networks. In China, rivals such as Xiaomi Corp previous month publicized models with 5G features starting at about $425.

With wavering hardware sales, Apple has been capitalizing in subscription services such as its Apple TV+ streaming television service, Apple Music and iCloud. The fresh SE will come bundled with a one free year of the streaming television service, similar to Apple's flagship devices out last fall.

The company also set out a goal to range 600 million paid subscribers by the end of calendar 2020.

The coronavirus has shaped a volatile start to the year. Sales in China, the primary nation hit by the virus, plunged, then rebounded as the country began to reopen. Sales of 500,000 phones in February rose to 2.5 million phones in March, allowing to government sales data there.

Apple will begin marketing the new model online while its stores around the world are closed, except those within its greater China sales region. Apple will start taking orders for the phone on its website on Friday, with distribution of devices expected to start April 24.

Apple gets about 31% of its sales from its stylish stores and website, with 69% coming from partners such as mobile carriers and other shops. Apple said partners would decide whether to sell the phones in their physical stores. Many of Apple's resellers are trying to guide clients to online sales. Major partners such as Best Buy Inc have compact their hours, and AT&T Inc has closed about 40% of its U.S. retail stores.