Apple killed the iPhone SE to protect its profit margins

Apple recently unveiled the iPhone 16e: a replacement for the now-discontinued iPhone SE line. The iPhone 16e incorporates more features from its flagship counterparts and truly feels like a smaller brother for the “main” phones. But it also comes with a massive price hike over previous mid-range iPhone models and has led to contention across social media about whether it’s worth the asking price.

Apple insider Mark Gurman says in his newsletter that the decision to price the iPhone 16e was not made to future proof the phone against any impending tariffs. In fact it wasn’t even priced this way to account for inflation or a similar economical problem.

No, Gurman says that the iPhone 16e starts at $599 because Apple wanted to protect its profit margins that may suffer from sluggish iPhone 16 sales.

iPhone 16 is incomplete

Wait, why is Apple worried about sluggish iPhone 16 sales? Isn’t the iPhone Apple’s best performing product of all time? Yeah, it is. The thing is that the iPhone 16 is objectively an incomplete product.

Apple’s most advertised and most heavily marketed selling point for the iPhone 16 was Apple Intelligence. “Built for Apple Intelligence” was and still is plastered over every poster you see for the newest iPhone series. And yet Apple Intelligence wasn’t even available at launch.

When it did come out it was incomplete. Apple promised that the remaining features would be rolling out in the coming iOS updates. Then they got delayed and then they got delayed some more. Now it’s gotten to the point where ‘personal Siri’ — the most anticipated AI upgrade — may not see the light of day until 2027. And the features we do have are comically bad compared to competitors.

There’s also talks about Apple scrapping its entire AI effort and starting from scratch. Apple has also removed the personal Siri advertisement as it was blatantly marketing something that is not actually available to consumers. And if the company does restart its AI efforts then that video would have probably been outdated anyway.

Passing on the burden to consumers

All of these problems have supposedly gotten Apple preparing for poor iPhone 16 sales. The iPhone is already performing much worse in a major region: China. There are multiple reasons for Apple’s decline in market share in China but the most crucial one is that the iPhone 16 is an even more incomplete device outside the U.S.

The EU is only now getting their hands on Apple Intelligence. They also get access to a host of other features like sideloading and third party payment systems that U.S. consumers do not. China still does not have Apple Intelligence so the iPhone 16 doesn’t even deliver its most marketed feature in the country.

Coupled with rising political tensions, Chinese consumers are turning to domestic offerings en masse. Huawei and Xiaomi are seeing significant growth in their home country as Apple continues to lose customers.

But being worried about iPhone 16 sales does not warrant passing on extra costs to consumers. These aren’t tariffs that the company couldn’t avoid even if it tried. Poor sales performance is entirely Apple’s fault and the consumer is not to blame let alone pay for it.

iPhone 16e is not the iPhone SE

Before the iPhone 16e came out I said that Apple was giving up a way to get more iOS users. The only thing it had to do was not discontinue the iPhone SE and instead start selling it for a reduced cost. This would have, in my opinion, helped the company snag a significant number of new iOS users. Especially in lower income regions where flagship smartphones are out of reach for most people.

Apple could have still done this by introducing a new iPhone SE model alongside the iPhone 16e. Though a bit redundant it would have still provided a much easier barrier of entry into the Apple ecosystem.

But the smartest choice would have been to simply keep the iPhone SE. Sure, name it the 16e for easier categorization but don’t jack up the cost by $170. Take away Apple intelligence which users don’t care for, slap on a cheaper camera and most importantly of all: don’t pass on the responsibility of protecting your profit margins to the consumer.

There’s a reason that the iPhone 16e has received such negative attention across the internet: it’s not the iPhone SE that Apple users were waiting for.