Apple has unveiled the iPhone 16e, a new model that introduces artificial intelligence (AI) capabilities at a lower price than its premium offerings.
According to Apple, the iPhone 16e features the same processor as the larger iPhone 16 and offers similar storage options. However, it has a lower overall specification, including fewer cameras. The company hopes that adding AI functionality to a more affordable device will attract buyers, particularly as iPhone sales declined at the end of last year. However, analysts remain uncertain about whether AI-driven features will significantly boost sales.
The name “16e” appears to reference Apple’s iPhone SE series, which offered budget-friendly models between 2016 and 2022. Pre-orders for the iPhone 16e will open on February 21 in 59 countries, with a UK launch price of £599—£200 cheaper than the iPhone 16 but more than double the cost of the original iPhone SE in 2016.
Industry expert Paolo Pescatore called the 16e “one of the most affordable and powerful iPhones on the market,” predicting that it would help drive AI adoption within Apple’s ecosystem. However, others remain skeptical about consumer interest in AI, noting that despite Apple’s $189 billion (£150 billion) investment in AI over the past decade, its major AI-driven products—such as the HomePod and Vision Pro headset—have yet to make a significant impact.
One key feature of the iPhone 16e is its new C1 modem, marking the first time Apple has designed its own modem for an iPhone. Previously, the company relied on Qualcomm and Intel chips, incurring costly licensing fees. By developing its own modem, Apple moves closer to its long-term goal of controlling the core technology behind its products.
Apple has also equipped the 16e with its powerful A18 chip, the same processor found in its high-end models. This ensures the phone can handle demanding games and apps, with AI expected to play a central role. CEO Tim Cook emphasized that the device delivers “the performance, intelligence, and privacy” Apple users expect, with AI features designed to streamline tasks and enhance self-expression.
The introduction of “Apple Intelligence” on this device includes new writing tools and deeper integration of OpenAI’s ChatGPT into Siri. However, Apple has faced challenges with AI implementation, such as an earlier suspension of AI-generated news alerts due to inaccurate headlines.
Apple claims the iPhone 16e is “built for Apple Intelligence,” highlighting features like AI-assisted photo editing and image searches. Similar tools are available on competing smartphones, but the 16e will be the most affordable way to access Apple’s AI ecosystem.
Forrester analyst Dipanjan Chatterjee sees the 16e as a strategic move, particularly in markets like India, where Apple’s premium devices are often unaffordable. Additionally, the lower price point may encourage owners of older iPhones to upgrade, as Apple actively promotes comparisons between the 16e and models dating back to 2019.
While customer demand for upgrades has been relatively low, Chatterjee believes the 16e could lower the financial barrier for users looking to adopt Apple’s AI-powered features.
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