Apple keeps iPhone from going too downmarket
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The world’s most valuable company announced the newest addition to its largest business on Wednesday. The iPhone 16e succeeds the iPhone SE models as the cheapest smartphones in the company’s lineup—except they are no longer that cheap. The new iPhones start at $599, compared with the $429 starting price of the most recent SE version.
The average price of the new 16e configurations is also just 31% below the average price of all the other iPhones Apple currently sells as new. That compares to a 52% discount that the iPhone SE offered to the rest of the company’s lineup prior to Wednesday’s launch. The price qualified as the biggest surprise in what was a widely expected announcement that even tight-lipped Apple Chief Executive Tim Cook teased publicly last week.
Apple launched its first SE phones starting at $399 in 2016; it last updated the lineup in 2022. A more premium price tag could limit the appeal of the 16e, at least for those on a tight budget. It also makes the 16e less likely to help lift the current iPhone cycle out of its doldrums.
Last month, Apple reported a nearly 1% decline in iPhone revenue for its December-ending quarter—the first full period of sales for the iPhone 16 family, the company’s first artificial-intelligence-enabled devices. Analysts now expect iPhone unit sales to fall nearly 3% in the fiscal year ending in September, according to consensus estimates from Visible Alpha. But chasing the lower end of the market also has its risks.
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