The iPhone is the most important device for Apple, but the start is also becoming more and more expensive with the SE successor. Why does Apple leave the “Budget smartphones” of the competition?
Apple went well with high prices for years, but most recently the sales have weakened. Technology jumps are now manageable, new models no longer really differ from predecessors. The motivation to buy a new and expensive device is moderate for many customers.
The price for the new iPhone 16E is at least 699 euros and is therefore not a bargain. The predecessor, the iPhone SE, cost 519 euros at the start of sales three years ago. However, if you have been looking at a new Apple cell phone for a long time, you now have a cheaper alternative with the 16e. It costs 250 euros less than the iPhone 16. This wants to address Apple more conscious target groups.
Technical closeness to the iPhone 16
Because technically the “e” model is not too far away from the 16-model. It has the same A18 chip, and Apple also installs a specially developed 5G modem for the first time. This makes the group independent of the previous supplier Qualcomm. Users should notice the difference, especially in the battery life: According to Apple, the modem consumes less electricity, which extends the operating time.
Compared to the last SE, the direct predecessor, the display is larger (6.1 inches), and the device can now also be unlocked with face ID – i.e. with the face. The sensor for unlocking was abolished by fingerprint and the old Lightning connection for charging, an EU regulation stipulates USB-C sockets for all cell phones.
Like the SE, the 16e only has a camera lens. That presses the costs, and Apple also needs arguments for its much more expensive premium models: they have the better cameras.
Really cheap smartphones only with the competition
Devices below 500 euros now only offer Samsung, Google and the manufacturers from China. Apple can or does not want to keep up in this price range. Google now offers its Pixel 8a for 399 euros. The mid-range devices from Samsung or Huawei are also available for less than 400 euros.
The change of price strategy at Apple comes at an interesting moment, says Mark Gurman, Apple reporter at Bloomberg: In the actually strong Christmas business, iPhone turnover in China has decreased by eleven percent, one percent worldwide. The easiest way to change this is to increase prices – that's exactly what happened. “It shows that Apple is not hunting for higher sales figures, especially since the company no longer shows these figures and does not want to compromise on the profit margins.”
Does Apple's strategy work?
Gerrit Schneemann, analyst at Counterpoint Research, is confident. The reason is the display that is larger than that of the SE predecessor. “Apple realized that people are interested in a larger display,” he told CNN. “Even if that means that you have to give up the lower entry price.”
“You have to make sure that this device offers so much that it is worth $ 600 to a buyer, but not so much that someone who would otherwise spend much more also opts for this device,” said Daniel Newman from the Tech Research company The Futurum Group.
Manufacturers rely on AI functions
Mergs emails, voice assistants who understand more complex questions or emojis that can create users according to their own wishes: Features that work with artificial intelligence are becoming increasingly diverse, more sensible and also working better. Google focuses on its own assistant Gemini and thus also equips Samsung devices.
The iPhone 16e also has AI functions. Apple, however, depends on the development of its “Apple Intelligence” and is currently using the competition if necessary. If the in -house AI no longer knows, users can switch to Chatgpt from Openai.
Analysts are still skeptical
It is about this that Silicon-Valley analyst Daniel Ives is convinced of equipping as many users as possible with AI-capable Apple devices. “Hundreds of apps are introduced in the Apple ecosystem based on Apple Intelligence, which represents another important source of income for the group.”
In order to become more independent of iPhone sales, Apple has been trying to increase the income in other areas for a long time. Whether this works with the price, Mark Gurman is not so sure: “The company could have sacrificed part of its profit margin, build a killer phone for less than 500 euros and bring more people to his ecosystem.”
