With the iPhone 16e, is Apple abandoning budget devices?

When Apple announced the iPhone 16e, there weren’t many surprises. Rumors had already revealed that it would feature Face ID, an OLED display, a custom modem, and a version of the A18 processor found in the regular iPhone 16. It was a little surprising to see such a long battery life and the complete absence of MagSafe, but those are things that could’ve been reasonably predicted.

The craziest thing may be the phone’s price — $599. That’s $170 more than its predecessor, the iPhone SE, flying in the face of rumors that Apple wanted to keep the price under $500. For some shoppers, that may put a new iPhone out of reach, steering them further towards used ones or the many cheaper Android phones available.

Is Apple abandoning the budget market? Arguably, this is the case, but there are a variety of factors that explain the price hike, and I’d wait for some upcoming product launches before making a final judgment.

Related

5 reasons budget phones actually rule now

There are increasingly fewer reasons to blow your cash on a top of the line smartphone.

Is $599 still in budget territory?

More affordable may not be affordable enough

Pocket-lint / Apple

While $599 is relatively cheap for an iPhone, in the context of the broader smartphone market, I think many people would say that pushes the 16e firmly into mid-range territory. It’s similar in price to the Samsung Galaxy S24 FE, and costlier than the Google Pixel 8a. If you shop around, you can even get a foldable phone for less — the base version of the 2024 Motorola Razr is $500.

A counterargument might be that there’s extra value in the Apple ecosystem, such as long-term reliability, but that runs up against the brutal realities of the economy. If you’re a college student and/or working a retail, freelance, or service job, the gap between $429 and $599 could decide whether you’re paying rent this month. Carrier contracts and pay-later services will keep the iPhone 16e within the realm of reason, but its asking price is still a splurge, considering that some Android phones can cost $200 or less before any deals.

Apple may be trying to align the iPhone 16e with its price ladder strategy. It’s still $100 below the iPhone 15, but that’s close enough that people might consider paying to get upgrades like MagSafe, an ultra-wide camera, and the Dynamic Island. We’ll see, I suppose — I wouldn’t be surprised if (new) iPhone 15 sales tank, given that the phone uses a slower processor which can’t handle Apple Intelligence.

Related

Apple is being overly ambitious with Apple Intelligence, and it knows it

Apple’s goal is worth pursuing, but the company may be a little overeager to get there.

At a minimum, specs have advanced considerably. The 2022 SE was based on 2017’s iPhone 8, which used a 4.7-inch LCD, Touch ID, and less durable materials than any modern iPhone. Simply upgrading to 6.1-inch OLED display, Face ID, and modern glass and frame design was bound to impact margins, particularly since Face ID requires custom camera tech.