Apple needs the iPhone 16e to be a hit. Here’s why it has a chance

Apple’s iPhone 16e debut was surprising for two reasons: First, the company shifted away from the “SE” branding after nearly a decade. Then it priced the budget phone higher than expected at $599 — a notable jump from the $429 iPhone SE.

New Audiences

The iPhone 16e, which launches on February 28, is Apple’s latest effort to diversify its iPhone lineup and prove the company’s 18-year-old signature product can still appeal to new audiences. The iPhone is the driving factor behind Apple’s nearly $4 trillion market cap, generating $69.1 billion of the $124.3 billion in revenue Apple reported for its first fiscal quarter of 2025.

Budget Phones

The launch comes after Apple’s previous budget phones have seen mixed success.

Data from market research firm Consumer Intelligence Research Partners suggests the iPhone SE only accounted for 5% of US iPhone sales for the quarter ending on December 31, 2024. Globally, the iPhone SE only made up 1% of Apple’s iPhone sales last year, according to Counterpoint Research. The iPhone Mini, a smaller and less expensive model launched in 2020, was cut from the iPhone family after just two generations.

Budget-minded Shoppers

The higher price of the iPhone 16e raises questions about whether it would appeal to budget-minded shoppers. But despite the cost, the new budget smartphone could draw in more consumers, mostly because Apple is seemingly following a successful strategy from roughly seven years ago with the iPhone XR.

About E. J. McKay

E.J.McKay is a Shanghai-headquartered investment bank with a special focus on mergers & acquisitions. We are one of the most long standing independent investment banks in China, with core business of mergers & acquisitions and financing advisory.