Apple has unveiled the iPhone 16e, its most affordable smartphone with built-in artificial intelligence, priced at $599.
The new model introduces Apple Intelligence, offering AI-driven features such as notification summaries and writing recommendations, initially in English, with expansion to other languages, including Chinese and Portuguese, in the coming months.
Replacing the iPhone SE, the iPhone 16e eliminates the home button and Touch ID in favor of Face ID, Apple’s facial recognition system.
The launch comes at a pivotal moment as Apple looks to revive iPhone sales, which have declined 2% since peaking at $205.5 billion in 2022. CEO Tim Cook has linked sluggish demand to the delayed rollout of Apple Intelligence, which is currently available only on the newest iPhones in select markets.
Despite the focus on AI, analysts suggest most consumers upgrade their phones due to aging batteries or performance issues rather than new software capabilities. However, Apple stands to benefit financially from raising the price of its entry-level iPhone, which is 40% higher than the $429 iPhone SE.
The price increase could boost revenue per unit sold, particularly as Apple’s annual iPhone sales volume has remained stable at around 230 million devices.
The launch follows the imposition of a 10% tariff on Chinese imports by President Trump, though analysts believe Apple’s price hike was planned well in advance. The move aligns with Apple’s broader strategy to lift prices across its product range amid stagnant volume growth.
Apple is also betting on the iPhone 16e to strengthen its global position, especially in China and India. In China, its second-largest market, Apple’s share of smartphone sales declined 2.4 percentage points last year to 15.5%, while competitors like Huawei gained ground. In India, Apple increased its market share to 11%, aided by strong iPhone 15 sales.
The iPhone 16e also marks Apple’s shift toward in-house connectivity technology with its custom-designed C1 modem, replacing Qualcomm’s chips. Apple has been working on the chip since acquiring Intel’s modem business in 2019.
While the C1 does not yet match Qualcomm’s full feature set, experts say future versions could enhance battery life and extend to other Apple products, including iPads and Macs.
Apple introduced the iPhone 16e with a low-key online announcement, deviating from its previous high-profile launches. The company released a 13-minute video featuring Tim Cook, a contrast to the one-hour event held for the iPhone SE in 2022.
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