Apple unveiled a new 4-inch iPhone on Monday, confirming weeks of rumors about the impending debut of the device.
Dubbed the iPhone SE, the device comes with a 4-inch screen and looks somewhat similar to the iPhone 5s. However, it comes with several improvements including Apple's A9 processor and M9 motion coprocessor along with a 12-megapixel camera and longer battery life compared to Apple's earlier 4-inch iPhone, the iPhone 5s.
Indeed, while Apple's device looks somewhat similar to the iPhone 5s that it launched in 2013, it comes with the internal performance available in last year's iPhone 6s.
Apple unveiled the new phone at an event titled "Let us loop you in." Like other Apple events, the show kicked off with Apple CEO Tim Cook talking about privacy and the company's tussle with the FBI over unlocking an iPhone used by one of the San Bernardino shooters, but quickly turned its attention to the products the company plans to showcase.
Apple's iPhone business is critical to its success. During its last-reported quarter ending Dec. 26, Apple's iPhone business generated $51.6 billion of the company's total $75.9 billion in revenue. Apple sold nearly 75 million iPhones.
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However, the iPhone division's performance was somewhat disappointing. For one, iPhone revenue was up just 1% compared to the same period a year prior, and unit sales were flat. Considering Apple's iPad and Mac businesses were both down during the critical quarter, and Apple's other operations make up just a fraction of the company's total business, it was a worrisome signal to Wall Street.
The 4-inch iPhone is an opportunity for Apple to bridge the gap between last fall's iPhone 6s line launch and the expected unveiling of the iPhone 7 later this year. Every second year, Apple launches a major upgrade to its smartphone line, and 2016 happens to be one of those years. While the company has not confirmed its plans for the iPhone's future, rumors abound that the iPhone 7 will be a notable improvement over the iPhone 6s and come with 4.7- and 5.5-inch screen sizes, making them notably bigger than Apple's new iPhone SE.
The iPhone SE, meanwhile, has been one of the most popular Apple topics over the last several months among Apple followers. A slew of rumors have claimed to show the iPhone in action along with suggestions at the features it may offer. All the while, Apple remained silent and instead waited until its event on Monday at its headquarters in Cupertino, Calif. to showcase the device's features.
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In addition to its 4-inch screen, the iPhone SE comes with Apple's A9 processor that matches the chip found in the company's iPhone 6s line. The smartphone runs on Apple's iOS 9 platform and is now the replacement for the company's iPhone 5s, a device Apple introduced in 2013 but was still selling until today. The device also features Apple Pay support, thanks to the company's Touch ID fingerprint sensor. In addition, Apple says that the device features 802.11ac wireless compatibility.
The iPhone SE is likely to appeal to two types of shoppers: those who aren't so keen on big-screen smartphones, known as "phablets," and customers on a budget. While the iPhone 6s starts at $649 off contract, the iPhone SE's $399 off-contract price makes it more affordable. At that price, customers will get 16GB of storage. The device's 64GB model is available for $499.
Looking ahead, look for the iPhone SE to be available in both Apple stores and in participating retailers on March 31, though Apple will begin taking pre-orders on March 24. Apple plans to launch it in 110 countries by the end of May. And if history is our guide, it'll likely be popular: Apple says it sold 30 million 4-inch iPhones in 2015.
Read more: Apple March 'Loop You In' Event: Live Blog
For more on what's going on at Apple's event and the latest news from the company's first keynote of the year, click here for Fortune's liveblog.