Apple has officially introduced the iPhone 16e, a more affordable variant of its flagship iPhone 16, marking a significant step into the budget smartphone market. Priced at $599, the device will be available starting February 28.
The iPhone 16e is notable for being the first iPhone equipped with Apple’s own cellular modem, reducing the company’s reliance on external suppliers. It is also the most affordable iPhone to support Apple Intelligence, Apple’s suite of AI-powered features.
Competing in the Budget and AI Markets
With growing competition from Google and Samsung, particularly in the budget segment, Apple’s decision to integrate Apple Intelligence into a lower-priced device could be crucial in expanding its AI ecosystem. Rival brands have been aggressively rolling out AI-powered features, such as Google’s Pixel A-series and Samsung’s Galaxy AI updates.
The launch of the iPhone 16e also signals a shift away from the iPhone SE, Apple’s previous budget model. Despite its lower price of $429, the iPhone SE accounted for just 5% of U.S. iPhone sales by the end of 2024, according to Consumer Intelligence Research Partners. Following the announcement of the iPhone 16e, Apple has removed the iPhone SE from its online store.
Features and Upgrades
While more affordable than the standard iPhone 16, the iPhone 16e shares several features with its premium counterpart, including:
- 6.1-inch display
- Face ID for facial recognition
- 48-megapixel camera
- Action button for shortcuts
However, the iPhone 16e lacks a secondary camera for ultra-wide shots and the new Camera Control button. It is powered by the same processor as the rest of the iPhone 16 lineup, enabling Apple Intelligence capabilities.
Apple’s AI tools—introduced last year—include emoji and image generation, notification summaries, and ChatGPT integration with Siri. While competitors like Microsoft and Google have rapidly adopted generative AI, Apple has been more cautious, only recently expanding these features across its ecosystem.
A Strategic AI Push
The iPhone 16e’s introduction highlights Apple’s vision for AI as a core element of future products. By bringing Apple Intelligence to a budget device, the company is ensuring that more users have access to its AI capabilities, which could influence future smartphone upgrade trends.
Despite Apple’s strong brand presence, the effectiveness of AI features in driving sales growth remains uncertain. Apple’s iPhone revenue fell short of expectations in its fiscal first quarter of 2025, making the iPhone 16e a crucial move in reshaping its smartphone strategy.
