Apple unveiled an entry-level iPhone 16 model on Wednesday, following a familiar playbook to target cost-sensitive markets and expand its brand appeal, particularly in Asian countries like India and China. The new iPhone 16e joins the existing iPhone 16 lineup and is nearly as fast and capable as its more expensive counterparts but costs less than the mainline iPhone 16 (review), starting at Rs 59,900. Pre-orders for the iPhone 16e will begin on Apple’s website this Friday, with sales starting on February 28.
The iPhone 16e features the powerful A18 chip, as seen on the flagship iPhone 16 series. It also has a 6.1-inch OLED display to match the rest of the iPhone lineup, Face ID is in a display notch, a customisable Action Button and a USB-C port, which was first introduced with the iPhone 15, is also present, and a design reminiscent of the iPhone 14 (review). Additionally, it supports Apple Intelligence, making it the most affordable iPhone to feature Gen AI capabilities. The handset has a single-lens 48-megapixel camera, unlike the iPhone 16, which has a dual-lens camera system.
The base iPhone model, however, comes with an Apple-designed 5G modem—the first iPhone to feature it—highlighting Apple Inc.’s effort to develop its own modem technology and reduce reliance on Qualcomm Inc.’s cellular modems in the future. Apple claims that the new C1 cellular modem, combined with the A18 chipset and iOS 18, has resulted in longer battery life on the iPhone 16e.
Larger screens and pro-grade cameras have proven popular, allowing companies like Apple and Samsung to maintain high average smartphone prices (ASPs) for their ultra-flagships over the past few years. The iPhone 16e, for instance, isn’t aimed at enthusiasts who want luxury devices and are willing to pay a premium for superior cameras or a jumbo-sized screen. For Apple, however, the iPhone 16e offers a way to target price-sensitive consumers who upgrade their smartphones every three to four years. This means the primary upgrades to the iPhone 16e will come from users of older models, especially those still using the iPhone XR and iPhone 11.
With Apple’s latest-generation A18 chip, the iPhone 16e delivers an incredibly fast and smooth experience for everything, from everyday flipping between apps to mobile gaming and Apple Intelligence. (Image: Apple)
With the iPhone 16e, Apple has changed its strategy and is no longer selling it under the iPhone “SE” branding. This could be due to the perception that consumers have of iPhone SE devices as low-tier products. However, in reality, iPhone SE devices have also not performed well in terms of sales, which may be another reason why Apple has changed its approach.
The lifetime sales of the second and third-generation iPhone SE (review) models reached 42.3 million and 35.2 million units, respectively, as reported by Canalys data provided to indianexpress.com. The third-generation iPhone SE sales figures indicate underperformance compared to its predecessor. These figures are significantly lower than sales of models like the iPhone 13 (137.4 million), iPhone 14 (70 million), and iPhone 14 Pro (54.8 million). However, the iPhone SE series has outsold models like the iPhone 13 mini (13 million), iPhone 14 Plus (18.3 million), and iPhone 15 Plus (16.4 million).
“The second-generation version for Apple was particularly strong, launched in 2020 and capturing the pandemic’s demand-boom amid semiconductor supply shortages hitting the low-end. The third generation was not strong enough of an upgrade from the previous generation, despite including 5G connectivity, but it also came across Apple’s portfolio diversification strategy,” said Canalys analyst Runar Bjorhovde.
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According to Bjorhovde, Apple has maintained a dual-focused portfolio strategy for the past few years: first, the Pro range to continue growing ASPs, and second, keeping older iPhone models on the market at discounted prices to cater to budget-conscious consumers. This strategy has worked well for Apple in markets like India, but the iPhone 16e also puts the company in “a more vulnerable position.” This may be due to the higher price of the iPhone 16e, which is $200 more than what the iPhone SE was sold for.
It remains to be seen whether there will be enough demand for Apple’s iPhone 16e, especially when the older iPhone 15 and the base iPhone 16 are available at discounted prices. However, the launch of the iPhone 16e also makes it clear that Apple doesn’t want to sell a cheaper model at a time when the market clearly favours a trend where consumers are willing to spend more on a premium smartphone rather than settling for a budget device, often taking advantage of cashback offers and “affordable” financing schemes. This trend places greater emphasis on value and long-term prospects, which also explains why Apple’s previous-generation devices like the iPhone SE and iPhone XR were not best-sellers. Despite some trade-offs, the iPhone 16e fits well within this space.
Experts say that India could serve as a test bed for how consumers receive the new iPhone 16e, especially given the abundance of choices from Chinese smartphone makers and the availability of second-hand flagship devices at significantly lower prices. The iPhone 16e isn’t cheap; it is positioned between the mid-range and premium segments, catering to a new audience and making its pricing a strategic move. Apple entered the top five smartphone brands in India for the first time in the quarter ending December 2024, capturing over 9 per cent market share, driven by strong sales in the country’s smaller towns.
The launch of the new iPhone 16e also addresses Apple’s need for a mid-range device, particularly in Europe. This launch fills the void left by the discontinuation of older models like the iPhone 13 (review), iPhone 14, and third-generation iPhone SE, which were phased out last year to comply with the EU’s USB-C mandate. Additionally, the EU’s upcoming eco-design regulations, effective from 20 June 2025, necessitate design changes that Apple will implement in the SE model. Europe represents a significant portion of Apple’s global shipments, accounting for over 15 per cent in 2024, according to Canalys, making it a crucial market for both sales and service revenue.
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Some trade pundits say Apple’s iPhone 16e is part of its tried-and-true strategy to extend the life of a product line that has saturated the market. The addition of a new lower-tier “e” series product at a significantly higher price is a way to continue growing the user base and encourage customers to use their devices even more. However, the larger aim is to get existing iPhone owners to spend more on services within Apple’s ecosystem. Services generated nearly $100 billion in revenue over the past year, CEO Tim Cook said during a recent earnings call. Apple has amassed more than 1 billion subscriptions across its services, including those from third-party apps in the App Store.
