Apple has just announced the iPhone SE, a new 4-inch smartphone that offers a smaller and cheaper option to the company's flagship iPhone 6S and 6S Plus. It's like a mix between the iPhone 5 and iPhone 6 generations of devices, taking the size and design of one and the latest specs and capabilities of the other. Apple calls the iPhone SE "the most powerful 4-inch smartphone ever."

At the heart of the iPhone SE is the 64-bit Apple A9 processor together with the embedded M9 motion co-processor, the same as the iPhone 6S. That means it can play games just as brilliantly as Apple's current flagship, plus it supports hands-free "Hey Siri" prompting. The camera is also carried over from the 6S, it's the same 12-megapixel iSight camera with a dual-tone flash and the ability to shoot Live Photos and 4K video.

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Compared to the iPhone 5S that precedes the new SE at the 4-inch size, Apple's new smartphone has faster LTE, faster Wi-Fi (802.11ac), better battery life, new microphones, and the significant addition of Apple Pay support. Having sold 30 million 4-inch iPhones in 2015, Apple clearly considers this an important market that it needed to address with its latest specs and capabilities and that's what the iPhone SE aims to achieve.

"Many, many customers have asked for this," said Apple CEO Tim Cook during Apple's launch event. "And I think they're going to love it."

The new iPhone SE starts at $399 with 16GB of storage and maxes out at $499 with 64GB. It'll be available in gold and rose gold colors alongside more traditional light and dark options. Preorders begin on March 24th and the phone will be available on March 31st. The iPhone SE will be in more than 100 countries by the end of May.

Read next: Our iPhone SE review