Apple has introduced a souped-up version of its most affordable iPhone, aiming to broaden its reach by integrating advanced artificial intelligence (AI) features while still maintaining a lower price point compared to its flagship models. The new iPhone 16e, unveiled on Wednesday, represents the fourth generation of a budget-friendly model designed to appeal to a broader audience, offering a mix of upgraded technology and affordability.
The iPhone 16e builds on the foundation of the iPhone SE, which was last updated in 2022. While the SE series was known for its budget-friendly pricing, the iPhone 16e brings enhanced AI capabilities, including features that automatically summarize text and audio, create emojis in real-time, and improve the virtual assistant Siri’s performance. The phone also boasts a more powerful battery and a better camera, bringing it closer to the high-end iPhone 16 series unveiled in September 2024.
However, all these upgrades come with a price increase. Starting at $600, the iPhone 16e is 40% more expensive than its predecessor, which was priced at $430. Despite the jump in price, the 16e remains cheaper than the standard iPhone 16, which begins at $800. The new device will be available for pre-order on Friday, with shipments beginning on February 28.
Apple’s decision to enhance its low-cost model comes as the company seeks to strike a balance between offering a more affordable option to attract a wider customer base and maintaining the exclusivity of its higher-end products. As Forrester Research analyst Dipanjan Chatterjee points out, Apple’s challenge lies in ensuring that the more affordable models are “good, but not so good as to cannibalize the crown jewels” of its premium product lineup.
Since last June, Apple has been emphasizing its AI advancements, which it calls “Apple Intelligence.” However, the full suite of AI features has yet to be made available in the US, and some regions of the world are still waiting for updates. The delays in rolling out the AI technology have impacted Apple’s sales, particularly during the 2023 holiday season, when iPhone sales saw a slight dip compared to the previous year.
One of the areas where Apple has been struggling is in China, where the iPhone’s AI features have not yet been made available. However, the company has recently formed a partnership with Alibaba, which could help bring AI capabilities to iPhones in China by mid-2025.
The iPhone 16e also introduces a fresh design. It features a larger 6.1-inch display, replacing the 4.7-inch screen of the previous SE models. Additionally, the home button has been removed, and the device now includes facial recognition for unlocking, aligning it with the higher-priced iPhone models.
With its blend of enhanced features, new design, and strategic pricing, Apple hopes the iPhone 16e will attract customers looking for an affordable yet capable iPhone while also expanding its AI ecosystem.
