After what feels like years of speculation, Apple has finally announced the newest lower-cost iPhone — the iPhone 16e. I say lower cost with a very big caveat, though. While the iPhone 16e is notably cheaper than the iPhone 16, the $599 price tag means that the 16E is not what we’d call a “cheap” phone.
Currently our list of the best cheap phones cuts things off at $500, which is admittedly not a small amount of money. But when flagship phones start at $799 and often cost in excess of $1,000, suddenly being asked to pay 500 bucks doesn’t seem so unreasonable — especially if you split the cost over 2-3 years.
Sadly, Apple seems to have decided that marketing to the value-minded phone buyer isn’t so important with iPhone 16e. It’s not that the phone doesn’t offer a lot, but in my opinion the price tag is far too high for the kind of customer Apple should be trying to court.
The benefits of offering a cheap iPhone
iPhones are, without question, the real money makers at Apple. During its first quarter earnings call at the end of January, Apple confirmed that iPhone sales accounted for $69.1 billion of sales — over half the $124.3 billion total. Needless to say, Apple wants to sell as many iPhones as possible, and make the most amount of profit in the process. That’s business.
But there’s more to Apple than selling hardware. In recent years Apple has done some pivoting towards the software side of things, bringing in money from services and other digital revenue streams. Not just in terms of subscriptions to things like Apple Music and iCloud, but also because Apple takes a cut of every transaction that happens on Apple platforms. Whether it’s the App Store or Apple Pay, Apple gets its share of the sale — much to the chagrin of some of its rivals.
In the last quarter of 2024, that added up to $26.3 billion — more than a third of its iPhone sales, and nearly as much as all Mac, iPad, and Apple Watch and AirPods sales combined. All Apple has to do is make sure people keep buying iPhones and making purchases with it. The key part of that is getting iPhones into the hands of as many people as possible, and ensuring they don’t decide to switch to Android.
The problem is that iPhones are expensive, and not everyone can justify spending flagship prices on a new phone — even if it is every 3-4 years. So devices like the iPhone SE played a crucial role in bringing users onto team iPhone, with something that’s relatively affordable — even if it’s not top-of-the-line.
The iPhone SE 3’s $429 price tag handled this role quite nicely, and it’s something the $599 iPhone 16e is probably going to struggle to live up to.
Why the iPhone 16e is so expensive
Looking at the specs for the iPhone 16e, it's clear why the phone costs so much. There are a number of compromises made to the phone, but not as many as you would have thought if you’re familiar with the three generations of iPhone SE.
The main trade-offs are that there’s no MagSafe, no mmWave 5G and a slightly less powerful GPU in the A18. You also don't get a Dynamic Island for live updates at the top of your display.
The real problem isn’t what this phone can do, but how many people will be priced out of the iPhone 16e because of the hike versus the iPhone SE 3.
Everything else the iPhone 16 has to offer, so does the iPhone 16e. Even Apple Intelligence, which has some pretty stringent hardware requirements, is available in full on iPhone 16e. That includes Visual Intelligence, something that had previously only been available on the rest of the iPhone 16 series.
Heck, even the iPhone 15, which is less than 18 months old, isn’t capable of running any Apple intelligence features. You needed a more expensive iPhone 15 Pro at the very least.
Combine this with things like satellite connectivity, the 48MP Fusion camera lens, Action button, Ceramic Shield glass, IP68 water and dust resistance, and all the other things the iPhone 16e has to offer, and you can understand why it’s priced the way it is. There’s a lot of great tech in this phone, and good tech costs money.
The real problem isn’t what this phone can do, but how many people will be priced out of the iPhone 16e because of the hike versus the iPhone SE 3.
Bottom Line
The iPhone 16e looks like a good phone. There’s a lot going for it, and it looks like it could be a solid alternative to the iPhone 16 series. But that doesn’t change the fact that Apple has priced the phone far too high, and seemingly lost sight of why it offers a cheaper iPhone in the first place.
The iPhone 16e should be the equivalent of the Samsung Galaxy A55 rather than the Galaxy S24 FE. It needs to be able to stand on its own two feet, but in a way that keeps the price low enough for people who can’t (or won’t) pay $799 for an iPhone 16.
Maybe the sales figures will prove me wrong, But something tells me that the $599 price tag is only going to get in the way of the iPhone 16e’s potential for success.
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