Apple has revealed a new iPhone that offers artificial intelligence (AI) features at a lower price point than its flagship devices. The iPhone 16e, according to Apple, has the same processor as the larger iPhone 16 and comparable storage options, but it has lower specifications elsewhere, such as fewer cameras.
Apple has been having trouble coming up with a new product that appeals to customers; sales of iPhones fell at the end of last year. The company hopes that adding more AI functionality to a less expensive phone will help with that, but analysts have been wary of the sales boost such tools bring.
The iPhone 16e will go on sale in the UK for £599, which is £200 less than the iPhone 16 but more than twice as much as the original iPhone SE cost when it first came out in 2016.
“This now becomes one of the most affordable powerful iPhones now on the market,” industry analyst Paolo Pescatore told BBC News.
“The move should help accelerate adoption and especially its foray into AI with Apple Intelligence.” The company’s name is a clear reference to its iPhone SE series, which were released from 2016 to 2022 and were also less expensive.
“All we have to show for that is the HomePod and $3,500 ski goggles,” said Cory Johnson, chief market strategist at Epistrophy Capital Research, in reference to Apple’s Vision Pro headset, which has not sold many units. “AI should be right in Apple’s wheelhouse.
But Apple fanboys, fangirls, and investors are right to be disappointed so far,” Mr. Johnson added. Meanwhile, tech influencer Marques Brownlee claimed in a post on X (formerly Twitter) that the “most lowkey interesting thing” about the iPhone 16e was its new C1 modem.
Adopting its own modems would also help the tech giant realise a vision laid out by chief executive Tim Cook in 2009 of owning and controlling the technology powering its products. This is the first time Apple has used its own modem design for the iPhone.
To provide cellular connectivity, Apple previously relied on Qualcomm and Intel’s chips, which also required paying expensive licensing fees to those chip giants—something Apple has previously wrangled over with Qualcomm in court.
Apple Intelligence
Since Apple has chosen to use the same A18 chip that powers its more expensive devices, a lot of discussion about the new phone will probably focus on its power.
Although AI was probably a major factor in this choice, it means the 16e will be able to run the same apps and play the same games as other iPhones.
Mr Cook said at the announcement the new model offered “the performance, intelligence and privacy” Apple consumers “expect” from the business.
And he added the Apple Intelligence capabilities on the smartphone will “help you save time, quickly get more things done, and express yourself in new ways”
Apple said its new phone is “built for Apple Intelligence” and highlighted some of the technology’s features, such as an easy way to clean up photos or search your image library. The company’s spin on the technology, known as Apple Intelligence, was introduced with this series of devices, which includes new tools for writing and integrating OpenAI’s chatbot ChatGPT into Siri.
However, things haven’t always gone as planned; at one point, the company suspended its AI-generated news alerts after they created fake headlines attributed to news organisations, including the BBC.
Though the iPhone 16e will be by far the least expensive option to get AI on an Apple phone, other phone makers provide comparable functionality on their handsets.
“Apple’s new revenue stream from the iPhone 16e will be especially evident in important markets like India, where most people cannot afford iPhones,” stated Dipanjan Chatterjee, principal analyst at Forrester.
“There is also a second-order effect of cheaper devices like the iPhone 16e, bringing new customers into the Apple ecosystem,” he explained.
In an attempt to encourage upgrades, the tech giant also seems to be targeting owners of earlier devices with its new phone.
On the website, a graphic that reads “there’s never been a better time to upgrade” lets customers compare the specifications of the iPhone 16e to devices from as far back as 2019.
“We’ve seen a limited appetite among many of the installed base to upgrade from previous versions, but the new phone reduces the cost hurdle of joining the Apple Intelligence bandwagon,” commented Chatterjee.
