Apple announced on Wednesday the introduction of a more affordable variant of the iPhone 16, designated as the iPhone 16e. This move indicates the company’s renewed focus on the budget smartphone segment. Additionally, this model marks the first iPhone to feature a cellular modem developed by Apple, making it the most economical iPhone available that is compatible with Apple Intelligence.
The iPhone 16e is priced at $599 and is set to be released on February 28.
Incorporating Apple Intelligence into a more affordable iPhone may be essential for expanding access to the company’s AI tools among a broader consumer base. In recent years, Apple has encountered heightened competition from both Google and Samsung, particularly within the budget smartphone segment and the realm of artificial intelligence. For instance, Google’s more economical Pixel A-series smartphones have garnered positive reviews, and both Google and Samsung have focused on enhancing Android devices with new AI functionalities over the past year.
The introduction of the iPhone 16e signifies a departure from the iPhone SE, a budget-friendly model that Apple first introduced in 2016 and last refreshed in 2022. According to Consumer Intelligence Research Partners, the iPhone SE represented a mere 5% of the U.S. iPhone sales by December 2024, indicating its limited impact on Apple’s overall market share.
Although the iPhone 16e comes at a higher price point than the SE, it may attract consumers seeking a device that aligns more closely with Apple’s contemporary offerings. Notably, the iPhone SE was the final model to feature the traditional home button and front-facing fingerprint sensor, elements that Apple began to phase out with the launch of the iPhone X in 2017.
On February 13, Apple CEO Tim Cook hinted at the upcoming release through a social media announcement, revealing that a new “member of the family” would be unveiled on February 19.
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The features of the Apple iPhone 16e…
Apple asserts that the newly introduced 5G modem in the iPhone 16e is the “most power-efficient modem ever on an iPhone.” This development comes over five years after Apple acquired the majority of Intel’s smartphone modem business, which had been facing significant challenges, in 2019. By utilizing its own modems, Apple reduces its dependence on external partners and suppliers, thereby enhancing its control over product development and the timing of product launches.
The iPhone 16e represents a significant upgrade to Apple’s more affordable iPhone lineup. Priced at $429, the iPhone SE, although more budget-friendly, resembled the outdated iPhone 8 from seven years ago and was missing several features commonly found in contemporary smartphones, such as facial recognition and a nearly edge-to-edge display. Following the announcement on Wednesday, the iPhone SE has been removed from Apple’s online store.
The iPhone 16e shares several features with the iPhone 16, distinguishing it from the iPhone SE and aligning it with Apple’s latest offerings. Both models are equipped with a 6.1-inch display, Face ID technology, a 48-megapixel camera, and an Action button that allows users to set up shortcuts. Nevertheless, the iPhone 16e is more affordable and does not include a secondary camera for wide-angle photography or a dedicated Camera Control button for swift camera access.
This device operates on the same processor as the other models in the iPhone 16 series, granting it the capability to utilize Apple Intelligence. This term encompasses a range of AI-driven features that were previously exclusive to the iPhone 16 series, the 2023 iPhone 15 Pro and Pro Max, as well as select iPads and Macs. These features include the generation of emojis and images based on prompts, summarization of notifications, object removal from photos, and integration of ChatGPT with Siri.
The surge in popularity of ChatGPT following its release in late 2022 created significant ripples within the technology sector, leading major companies such as Microsoft, Google, and Samsung to integrate generative AI into their offerings. In contrast, Apple has been perceived as a late entrant in the realm of consumer-oriented artificial intelligence. While the company has utilized AI for various backend functionalities, such as enhancing camera capabilities, it only began to introduce Apple Intelligence to the market in the fall of last year.
The launch of Apple Intelligence on a more affordable device like the iPhone 16e indicates that Apple recognizes the importance of AI as a fundamental component of its future product strategy.
Leading technology firms have heralded generative AI and chatbots as the next significant advancement in consumer technology interaction. However, it remains uncertain whether AI innovations like Apple Intelligence will be sufficiently attractive to incentivize consumers to upgrade their smartphones, especially given that Apple’s iPhone revenue fell short of Wall Street’s projections in the first fiscal quarter of 2025.