Targeting the sinking market! Apple launches iPhone 16e, debuting its self-developed 5G modem, also supported by Apple Intelligence but 40% cheaper than Pro

The rumored iPhone SE 4 is here. In response to declining iPhone sales and increasingly fierce competition from Chinese rivals, Apple is targeting the lower market by launching a "substitute" for the high-end iPhone 16, which not only incorporates Apple's advanced artificial intelligence (AI) features but also comes equipped with its first self-developed 5G modem chip.

On Wednesday, February 19, Eastern Time, Apple announced that the latest flagship smartphone iPhone 16 series has added a budget-friendly new member, the iPhone 16e, which is expected to be the fourth generation iPhone SE. Like other members of the iPhone 16, the iPhone 16e is pre-loaded with iOS 18 and also features the AI capabilities brought by Apple's personal intelligence system Apple Intelligence, including ChatGPT-assisted writing and imaging functions.

The iPhone 16e, like other iPhone 16 models, also comes with Apple's latest second-generation 3-nanometer chip A18, which offers up to a 30% speed increase in CPU processing compared to the A16 chip used in the iPhone 15, and a GPU speed increase of up to 40%. This means that the iPhone 16e can also run applications and games designed for other high-priced iPhone 16 models.

Unlike other iPhone 16 models, the iPhone 16e does not continue to use Qualcomm's modem but is equipped with Apple's first-designed modem C1, which Apple claims is "the highest energy-efficient modem for iPhone." Earlier this year, there were rumors that the budget iPhone would feature Apple's self-developed 5G modem chip.

In terms of the camera system, the iPhone 16e also features a 48-megapixel fusion camera with a dual design, capable of taking ultra-high-resolution photos and utilizing optical-quality 2x telephoto capabilities to zoom in on distant scenes. However, the iPhone 16e has only one rear camera, while the standard iPhone 16 and Plus have two rear cameras, and the high-end Pro has three cameras.

Apple claims that the iPhone 16e has the strongest battery life among 6.1-inch iPhones, lasting up to 12 hours longer than the iPhone SE and 6 hours longer than the iPhone 11.

The iPhone 16e adopts facial recognition instead of fingerprint recognition. Since the release of the original iPhone in 2007, this is the first time Apple has not sold any new models with a Home button, marking the first complete abandonment of the Home button.

The iPhone 16e is available in black and white, with memory options of 128GB, 256GB, and 512GB, starting at a price of $599. Pre-orders will begin on Friday, February 21, and sales will start on Friday, February 28 The starting price of the iPhone 16e is $400 lower than the iPhone 16 Pro released in September last year and $200 lower than the standard iPhone 16, which means it is 40% cheaper than the high-end model of the iPhone 16 and 25% cheaper than the standard version. Compared to the previous generation iPhone SE released by Apple in 2022, the starting price of the iPhone 16e is $100 more expensive.

iPhone 16e may become the best-selling iPhone SE model; Ming-Chi Kuo expects shipments to exceed 20 million units this year

Apple has not updated the iPhone SE for nearly three years, and the launch of the iPhone 16e is seen as an effort to drive sales growth in the company's most important product category, the iPhone.

The financial report released at the end of last month showed that in the fourth quarter, which coincided with the heavy shopping season at the end of last year, Apple achieved a double-digit increase in service revenue that exceeded expectations, setting a record for the highest quarterly revenue in the company's history. However, in the first full quarter of sales following the launch of the new iPhone, the iPhone 16 series failed to maintain the sales momentum, with further declines in sales in China, the largest smartphone market.

In the fourth quarter, iPhone net sales fell 0.8% year-on-year to $69.14 billion, while analysts had expected a nearly 2% increase to $71.04 billion. During the same period, Apple's revenue in Greater China fell 11% year-on-year, a decline that far exceeded the 0.3% drop in the third quarter, while analysts had anticipated a 3.6% increase.

After the performance announcement, Apple executives explained that sales in Greater China in the fourth quarter were affected by reduced channel inventory and the lack of local launch for Apple Intelligence. They indicated that more than half of the year-on-year decline was due to reduced channel inventory and hinted that the national subsidies introduced by the Chinese government in January could help boost some iPhone sales, stating that the new "national subsidy" in January had no impact on the fourth quarter.

Apple's launch of a low-priced iPhone can ride the wave of the "national subsidy," and with the help of partners like Alibaba to launch Apple Intelligence features in China, it is expected to further stimulate sales.

Apple's "prophet," Tianfeng International analyst Ming-Chi Kuo, recently predicted that the iPhone SE 4 will ship over 20 million units this year, becoming the best-selling SE model of all time. The shipments in the first half and second half of the year are expected to be approximately 12 million and 10 million units, respectively. He believes that the new iPhone SE can mitigate the impact of the off-season on shipments while also increasing the penetration rate of Apple Intelligence

iPhone 16e Becomes Apple's Self-Developed Baseband Chip "Testing Tool"

Analysts believe that the iPhone SE 4, or iPhone 16e, will give Apple the opportunity to test its self-developed 5G baseband chip on a mobile phone before rolling it out to its flagship iPhone models.

Edward Snyder, Managing Director of Charter Equity Research and a veteran expert in the wireless industry, commented that the iPhone SE 4 is a "testing tool" because Apple wants to obtain field data on the chip's performance before integrating the baseband chip into the iPhone 17.

Snyder expects that 20% of the new products Apple releases this fall will be equipped with the self-developed modem, while the remaining devices will continue to use chips supplied by the current vendor Qualcomm. Snyder anticipates that if the self-developed modem performs well, Apple will completely eliminate Qualcomm's baseband chips within about two years