Apple has unveiled the iPhone 16e, a more affordable smartphone designed to bring artificial intelligence (AI) features to a broader audience. The company hopes this new device will help revive iPhone sales, which saw a decline at the end of last year.
The iPhone 16e comes with the same A18 processor found in Apple’s flagship iPhone 16 models but at a significantly lower cost. While it offers similar storage options, it has fewer cameras and a lower overall spec compared to its premium counterparts.
This move mirrors Apple’s past strategy with the iPhone SE series, which launched between 2016 and 2022 as a budget-friendly alternative to its flagship devices. The 16e’s pricing structure positions it as a more accessible option for consumers who want Apple’s latest AI capabilities without breaking the bank.
Apple has confirmed that the iPhone 16e will be available for pre-order from February 21 in 59 countries, launching in the UK for £599—£200 less than the standard iPhone 16. However, this is still more than double the original iPhone SE’s launch price in 2016.
Industry analysts see the iPhone 16e as a strategic step to increase the adoption of Apple’s AI-driven features. Paolo Pescatore, a tech analyst, noted that this launch could boost Apple’s AI ambitions and lure users away from competing platforms.
“This now becomes one of the most affordable powerful iPhones on the market,” Pescatore said.
“Apple’s trust and credibility alone will help drive sales and lure users from rival devices and platforms.”
The iPhone 16e’s A18 chip ensures that it can run the same apps and games as other high-end iPhones, making it a compelling option for those looking for performance at a lower cost.
Apple is branding its AI efforts under “Apple Intelligence,” a set of features that integrates machine learning and automation into everyday iPhone tasks.
During the announcement, Apple CEO Tim Cook emphasized that the new model delivers the “performance, intelligence, and privacy” that Apple users expect.
“Apple Intelligence features will help you save time, quickly get more things done, and express yourself in new ways,” Cook said.
Some of the AI-driven features include:
- Photo cleanup tools for removing unwanted objects from pictures.
- Advanced image search in the Photos app.
- Integration of OpenAI’s ChatGPT into Siri, enhancing its ability to provide context-aware responses.
Despite these innovations, Apple’s past AI rollouts haven’t been flawless. The company previously had to suspend its AI-generated news alerts due to false headlines being incorrectly attributed to major news organizations like the BBC. To address this, Apple has since adjusted how it presents AI-generated summaries by displaying them in italics to distinguish them from verified content.
By pricing the iPhone 16e lower than flagship models, Apple aims to attract new customers who previously found iPhones too expensive, particularly in emerging markets like India.
Tech analyst Dipanjan Chatterjee believes the iPhone 16e could be a game-changer for Apple’s expansion efforts:
“The iPhone 16e generates a new revenue stream for Apple, particularly in key markets like India, where iPhones are out of reach for most people.
There is also a second-order effect of cheaper devices like the iPhone 16e, bringing new customers into the Apple ecosystem.”
However, Apple is still under pressure to justify its massive spending on research and development. Cory Johnson, chief market strategist at Epistrophy Capital Research, pointed out that Apple has spent $189 billion on R&D over the last decade, yet many believe the company has not introduced groundbreaking innovations to match that investment.
“All we have to show for that is the HomePod and $3,500 ski goggles,” Johnson remarked, referring to the Apple Vision Pro mixed-reality headset.
“AI should be right in Apple’s wheelhouse. But Apple fans and investors are right to be disappointed so far.”
While the iPhone 16e offers an affordable entry point into Apple’s AI ecosystem, analysts remain cautious about how much it will actually boost sales.
Apple’s challenge will be to convince consumers that its AI features provide tangible benefits that justify upgrading their devices. Meanwhile, the broader smartphone industry is shifting toward AI-driven functionalities, meaning Apple will face stiff competition from rivals like Samsung and Google, which have already integrated AI into their devices.
The success of the iPhone 16e will ultimately depend on whether Apple Intelligence lives up to expectations—or if it’s just another marketing push in an increasingly crowded AI market.
