The iPhone 16e marks a significant evolution from the third-generation iPhone SE it takes over. Featuring a contemporary design, OLED display, Face ID, the latest A18 chip, Apple Intelligence, 48MP camera, 26-hour battery life, USB-C, C1 modem, and additional enhancements.
However, there is one more major distinction, and it’s this aspect that renders the new entry-level iPhone a vital test for Apple…
The price point.
While the iPhone SE 3 started at $429, the iPhone 16e is priced at $599.
Bear in mind, you’re receiving a substantial upgrade for your investment, and one could argue that the latest model offers improved value. Nonetheless, what stands out is that Apple didn’t simply add the iPhone 16e to its offerings; it entirely replaced the budget model.
There’s no iPhone SE 4 in existence, and the third-generation model has been removed from the company’s website. Presently, if you wish to purchase a brand new iPhone directly from Apple, $599 is the new baseline price.
$600 represents a significant amount compared to numerous mid-range Android alternatives, and Apple is betting that a sufficient number of former iPhone SE buyers are prepared to spend an additional $170 to opt for the iPhone 16e.
It’s apparent that some of the consumers comfortable with spending $429 may hesitate to pay $599. The pivotal question remains whether enough of them will do so to ensure Apple’s financial success.
The equation at play is ($429 x high sales volume) versus ($599 x lower sales volume).
Some might argue that Apple is optimistic the latter number will be larger – or, at the very least, the profit margin from that number. However, I believe this is not the case: I suspect Apple is uncertain. In my opinion, this represents an A/B test for the company, and the outcome will shape its future approach to entry-level offerings.
If Apple achieves greater profits by selling the pricier model to fewer customers, the $400 price range may vanish permanently; if not, a version of the iPhone SE could re-emerge.
Image: Apple
