Apple released the budget iPhone 16e last week, which will be launched on February 28th with a price tag of $599. This move aims to enrich Apple’s iPhone product line and attract new customers.
The iPhone plays a significant role in driving Apple’s nearly $4 trillion market value. In the first quarter of Apple’s 2025 fiscal year, the iPhone contributed $69.1 billion out of their total revenue of $124.3 billion.
The price of the iPhone 16e is higher than expected, leading to questions about whether it can attract savvy shoppers. Despite the relatively higher price, this new budget iPhone may still appeal to more consumers as Apple follows the successful strategy it implemented seven years ago with the iPhone XR.
The iPhone 16e is largely considered as a replacement for the iPhone SE, launching in the same timeframe as previous SE models by Apple. However, the iPhone 16e is more akin to the successor of the iPhone XR, introduced alongside the iPhone XS in 2018, catering to users seeking affordable devices with similar functionalities. Apple prioritizes screen size, battery life, and performance from the iPhone XR to the current iPhone 16e, making compromises in camera hardware to cut costs.
Gerrit Schneemann, a senior analyst at Counterpoint Research’s smartphone division, mentioned that despite the iPhone 16e not being officially released yet, some analysts believe it could be even more popular than the iPhone SE, partly due to its larger screen. The display of the iPhone 16e measures 6.1 inches, the same as the iPhone 16, while the iPhone SE has a 4.7-inch screen.
Schneemann stated, “Recognizing people’s interest in larger displays, (Apple) gave up on the smaller form factor even if it meant sacrificing a $400 price point.”
On the other hand, with a price tag of $599, the iPhone 16e still has a relatively high entry barrier compared to some Android phones. As noted in a report to investors by Wamsi Mohan, an analyst at Bank of America on February 19th, the impact of the iPhone 16e on the sales of the iPhone 16 remains a question.
Apple’s flagship iPhones usually steal the spotlight for a reason. According to data from market research company Kantar, the higher-priced Pro and Pro Max models often lead in global popularity.
Nevertheless, the iPhone 16e could help Apple attract customers who might have considered buying older second-hand iPhones or Android phones. It could also enhance Apple’s competitiveness in the Chinese market, where Apple faces fierce competition from local brands like Huawei and Xiaomi.
Most importantly, the iPhone 16e could play a crucial role in promoting Apple’s technology and applications. Integrating Apple’s smart assistant into the iPhone 16e means that even those unwilling to spend $800 or more on a new phone can access Apple’s artificial intelligence tools. At a time when competitors like Google, Microsoft, and Samsung are aggressively pursuing advancements in artificial intelligence, expanding access to Apple’s smart technology among consumers is crucial for the iPhone manufacturer.