What’s the deal with the iPhone 16e?

Apple has finally acknowledged that not everyone can, or wants to, drop flagship money on a smartphone. Enter the iPhone 16e, a supposedly more affordable alternative in the iPhone 16 lineup.

The problem? It’s priced at $599, a steep jump from the last “budget” iPhone SE, which started at $429; read more about the launch here.

This isn’t just any mid-tier launch though. The 16e is Apple’s latest attempt to claw back market share in places like China, where consumers are increasingly price-sensitive, and local brands like Huawei and Xiaomi are running circles around the Cupertino giant.

But by slapping a premium price tag on what is essentially a mid-range device, Apple is once again playing a risky game: trying to keep its luxury brand name while appealing to budget-conscious buyers. Spoiler alert – it doesn’t always work.

Apple’s main competitor

It’s not surprising that China’s smartphone market is cutthroat – and Apple isn’t winning. In 2024, iPhone shipments in China fell 17%, and Apple dropped to third place behind Vivo and Huawei. That’s Apple’s worst year in China since 2016, and the decline is showing no signs of slowing down.

Huawei, in particular, has made an impressive comeback with its Mate 60 series recently. The Chinese smartphone maker has faced its own unique challenges everywhere except its home country.

Here in South Africa, its brand equity took a massive hit after it lost access to Google services. The previous Trump administration placed strict sanctions against the tech giant which affected its brand globally.

Luckily Google is already banned in China, so that didn’t halt its growth in the country. It may have even improved the brand amongst patriotic locals.

Similar to Huawei, other local competitors are selling phones with top-tier hardware at significantly lower prices. Apple’s premium pricing strategy, which works so well in the West, just doesn’t hold the same appeal in China, where consumers expect cutting-edge features and good value.

The iPhone 16e: Budget-ish?

So what exactly do you get for $599? The iPhone 16e comes with Apple’s A18 chip, making it compatible with Apple Intelligence (aka Apple’s long-awaited AI features). It also debuts Apple’s first in-house cellular modem, the C1, which means they’re slowly cutting ties with Qualcomm.

But beyond that, it’s a pretty standard iPhone. No wide-angle lens. No ProMotion display. Just a phone that’s priced suspiciously close to last year’s iPhone 15. It feels like Apple is charging for the Apple logo rather than the actual hardware.

And let’s talk about that price. A 40% jump from the iPhone SE’s launch price isn’t just inflation – it’s a whole new pricing tier. Apple may be calling this an “entry-level” model, but entry-level for who?

At this point, the SE line is officially dead, and Apple’s idea of budget-friendly is creeping dangerously close to flagship territory.

Will this strategy work?

Apple’s playbook is predictable: slap “new” on a slightly tweaked iPhone, price it aggressively (by Apple standards), and hope brand loyalty carries it. It’s worked so far…

But the 16e feels out of step with reality. Chinese consumers, in particular, are hyper-aware of specs and value, and Apple isn’t exactly leading the charge in AI or innovation anymore.

To stay competitive, Apple has reportedly partnered with Alibaba to integrate AI features that better align with Chinese users’ needs. But is that enough to win back the audience Huawei is pulling in? I don’t think so.

When you can get a feature-packed Huawei or Xiaomi phone for less, why would you pay Apple tax?

If Apple wants to regain market share in China and other price-sensitive regions, it needs to rethink its definition of “affordable.” Because right now, the 16e feels less like a strategic comeback and more like a premium-priced consolation prize.