The iPhone 16e could be a big winner but it won't be due to iPhone SE owners upgrading
The iPhone SE is no more as last week Apple replaced its lowest-priced model with the iPhone 16e. Obviously, the big change Apple made was to bring the phone's design into the modern era by replacing the LCD panel with an OLED screen and turning to Face ID to unlock the phone rather than relying on the Touch ID fingerprint sensor.
To make sure that the iPhone 16e will work with Apple's Apple Intelligence AI initiative, the phone is equipped with a powerful 3nm A18 application processor (AP) like the one that powers the iPhone 16 and iPhone 16 Plus and with 8GB of RAM which is the minimum amount of memory that an iPhone needs to run Apple Intelligence. All of this is a big step up from the 5nm A15 AP and 4GB of RAM used on the previous low-priced iPhone model, 2022's iPhone SE 3.
Apple also added its own in-house 5G modem chip, the C1, replacing Qualcomm's Snapdragon 5G chip. Using its own modem chip Apple was able to make the phone more energy efficient. Toss in the larger 4005 mAh capacity battery and the iPhone 16e delivers the best battery life on any non-Pro iPhone model. Despite these improvements, CIRP doesn't see current iPhone SE owners upgrading to the iPhone 16e. It's all because of pricing.
iPhone SE owners don't like to pay up to upgrade which means that they probably won't be big buyers of the iPhone 16e. |-Image credit-CIRP
CIRP doesn't see the current group of iPhone SE owners shelling out $599 and up for the iPhone 16e. After all, 26% of those buying the iPhone SE 3 last year came from another iPhone SE model and only 3% of iPhone SE owners upgraded from the budget-priced phone to a higher-priced iPhone model. This means that it isn't likely that the iPhone 16e will generate much business from current iPhone SE owners since that group seems to have a distaste for paying more for a new phone.
Had Apple followed the rumors and launched the iPhone SE 4 instead of the iPhone 16e and kept it at around the same price, that model might have attracted current iPhone SE 3 owners. However, the iPhone 16e is not an SE model by name, price, and design. This could be good for Apple, or it could be bad.
Since the SE models have always generated 5% to 10% of iPhone sales, if consumers consider the iPhone 16e a totally new model not connected to the iPhone SE, Apple could have a surprise winner on its hands. On the other hand, if the iPhone 16e doesn't generate big-time sales from Android users, the success of the device could come at the cost of cannibalizing the sales of pricier iPhone models.
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