Apple has introduced a more stylish and pricier variant of its most affordable iPhone in a bid to attract a broader audience to its suite of artificial intelligence features. This strategy aims to boost demand for what is traditionally the company’s most lucrative product line.
The newly announced iPhone 16e is the fourth iteration in a series aimed at budget-conscious consumers and is expected to be significantly more enticing than previous budget models, known as the iPhone SE, with the last model released in 2022.
Similar to the iPhone 16 line-up that was revealed last September, the iPhone 16e is equipped with a powerful upgraded chip designed to manage various AI functions, including automatic text and audio summarization and generating real-time emojis while enhancing the efficiency of the virtual assistant, Siri. Additionally, the new model will feature an improved battery and camera capabilities.
With these enhancements in place, the iPhone 16e will have a starting price of $600, marking a 40% rise from the previous SE’s price of $430. However, it remains a more budget-friendly option compared to the baseline iPhone 16, which starts at $800. Consumers can expect to find the iPhone 16e in stores on February 28, with pre-orders starting this Friday.
Kaiann Drance, an Apple vice president responsible for marketing the device lineup, expressed enthusiasm over the addition of the iPhone 16e, stating that it serves as a robust yet affordable alternative aimed at expanding the iPhone experience to a larger demographic.
Apple faces the challenge of providing a more economical iPhone that can attract new customers while simultaneously maximizing profits from higher-end products. This balancing act has been highlighted by Forrester Research analyst Dipanjan Chatterjee, who noted the tension that arises when introducing a lower-end product within a luxury portfolio.
Despite Apple’s continued promotion of its AI ambitions since last June, many features of the new AI—termed “Apple Intelligence”—have yet to be fully rolled out in the U.S., and some functionalities are not accessible globally.
The delay in deploying the iPhone’s AI capabilities impacted Apple during the holiday sales season, as it experienced a slight decline in device sales compared to previous years. The company has particularly struggled in China, where it has not yet provided a timeline for when its AI technology will be launched. However, a recent collaboration with Alibaba in China may facilitate the introduction of these features in that market by spring.
In addition to embracing AI, the iPhone 16e presents a fresh design, featuring a larger 6.1-inch display compared to the 4.7-inch screen on earlier models. The new device has also eliminated the physical home button that was characteristic of the SE and now uses facial recognition for unlocking—matching the technology available in the premium models.
Following the announcement, Apple’s stock saw a slight increase, closing at $244.87, although it remains below its recent high of around $260, observed in late December.
