Apple releases small new iPhone, iPad for business use

CUPERTINO, Calif. (AP) — Apple unveiled a small new iPhone, a new iPad tablet for business use and price cuts for its Apple Watch at a product event today. The announcements, which were largely expected, aim to keep up the company's commercial momentum in the face of mounting challenges.

The company could use a lift. Sales of its flagship iPhone are leveling off after surging last year to record levels that made Apple the world's biggest company by stock market value. Many are wondering if Cook can come up with another big hit.

And on Tuesday, Apple lawyers will square off with authorities in federal court over the FBI's demand for help unlocking a San Bernardino killer's encrypted iPhone. The tech giant insists the government's plan would compromise security for all iPhone users.

While Apple's dispute with the government has commanded headlines for weeks, it warranted only a brief mention at the product event. "We did not expect to be in this position," CEO Tim Cook told the gathering. "But we believe we have a responsibility to protect your data and to protect your privacy."

The new phone – the iPhone SE – is an upgrade to the older, four-inch iPhone 5S, released in 2013. It's aimed at consumers who haven't sprung for the bigger-screen iPhone 6 models that Apple introduced over the last two years. The new phone comes with features like Apple Pay and the company's fastest processor, which have previously been offered only on versions of the iPhone 6.

Apple also unveiled a smaller model of the iPad Pro, which the company introduced last year with several features – like a detachable keyboard and stylus – designed for business users. The Apple Watch got a price cut, and will now start at $299, down from $349; it will also come with new wristbands made of woven nylon. Apple launched the smartwatch to great fanfare last year, although it has yet to win a big following.