Apple has released a sleeker and more expensive version of its lowest-priced iPhone in an attempt to widen the audience for a bundle of artificial intelligence technology that the company has been hoping will revive demand for its most profitable product lineup.
The iPhone 16e unveiled Wednesday is the fourth generation of a model that’s sold at a dramatically lower price than the iPhone’s standard and premium models. The previous bargain-bin models were called the iPhone SE, with the last version coming out in 2022.
Like the higher-priced iPhone 16 lineup unveiled last September, the iPhone 16e includes the souped-up computer chip needed to process an array of AI features that automatically summarise text and audio and create on-the-fly emojis while smartening up the device’s virtual assistant, Siri. It will also have a more powerful battery and camera.
All those upgrades will translate into a higher starting price for an iPhone 16e at $600, a 40 percent increase from $430 for the last iPhone SE. But the iPhone 16e will be more affordable than the cheapest standard iPhone 16 at $800. The new phone will be available in stores on February 28, but can be pre-ordered beginning Friday.
Maximise reach vs profits
Apple is also trying to balance its desire to offer a more affordable iPhone that will lure more people into its sphere of products against its interest in maximising its profits from selling higher price products, according to Forrester Research analyst Dipanjan Chatterjee.
“The problem with a lower-end product in a luxury portfolio is that you want it to be good but not so good as to cannibalise the crown jewels,” Chatterjee said.
Although Apple has been hyping its foray into AI since last June, the complete set of features still has not been released in the US, and the technology still is not even available in some parts of the world.
The delays in making the iPhone’s AI — dubbed “Apple Intelligence’” — more widely available through free software updates dinged the Cupertino, California company during the past holiday season, when sales of the device dipped slightly from their 2023 levels.
Apple has primarily been losing ground in China, where it has not yet specified when the iPhone’s AI technology will be available. But the company recently struck an AI partnership with Alibaba in China that could pave the way for the technology coming to iPhones in that country in the first half of this year.
Besides being able to handle AI for the first time, the iPhone 16e has a different look from previous SE models. It boasts a 6.1-inch display screen, slightly larger than the 4.7-inch display on the SE model and no longer has the home screen button that the SE had. The new iPhone 16e will include a facial recognition option for unlocking the device, just like the higher-priced models do.
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