Apple may launch a new version of its tiny, cheap iPhone from 3 years ago, and it could be just as crucial for Apple's business as the iPhone 11

As iPhone sales and worldwide smartphone shipments continue to decline, Apple has made a bigger push into services.

In March, for example, it announced a slew of new digital offerings which include subscription services for television, gaming, and news. It also released the Apple Card last month, a digital credit card that lives in the iPhone's Wallet app.

All of these services are designed to keep you hooked into Apple's ecosystem — and their success largely hinges on the company's massive installed base of iPhone users around the world.

The Apple Card, for example, requires that you have an iOS device in order to pay your bill and manage your account. And although the company's Apple TV app is available on smart TVs made by other companies like Samsung, it's the company's installed base of 900 million iPhones that could give it an edge when it comes to distributing its services. And launching a cheaper iPhone like a new iPhone SE could help it further expand that user base.

Read more: Apple cofounder says the Apple Watch is his 'favorite piece of technology in the world' because he doesn't want to be addicted to his phone

That's especially important considering Apple's biggest areas of growth — its services division and its wearables, home, and accessories business — depend on the iPhone.

Apple's services division generated $11.5 billion in revenue in the third quarter of 2019, an increase of 12.6% from the year-earlier quarter. The company's wearables, home, and accessories product category, which includes popular gadgets like the Apple Watch and AirPods, eclipsed iPad sales and is closing in on the Mac, as the firm's latest earnings report shows.

Launching a new low-cost iPhone could be a smart way for Apple to bring more users into its increasingly important web of services, accessories, and wearables.