Apple’s New iPhone 16E Launch Could Be Its Most Important in 2025

Apple’s $599 iPhone 16E is the biggest refresh ever for the company’s lower-cost phone, formerly called the iPhone SE, and it couldn’t arrive at a better time. With generative AI requiring beefier specs, and US tariffs on imports from China possibly bringing an increase in costs, Apple’s entry-level iPhone might provide enough new features to be worth the upgrade, even with its substantial $170 price bump over the $429 iPhone SE from 2022.

Economic considerations aside, the iPhone 16E represents the rare time when Apple rethinks its entry-level phone. The last iPhone SE refresh, in 2022, primarily added 5G connectivity and the processor of the iPhone 13. This allowed the iPhone SE to capably access faster cellular speeds and run most apps. But compared with similarly priced 2025 Android phones, Apple’s iPhone SE was woefully behind. New Android phones costing $500 or less have large 120Hz refresh rate displays, 50-megapixel main cameras and support for wireless charging. Meanwhile, the iPhone SE languished, with a dated design that hearkened back to 2017’s iPhone 8. And due to its Lightning port, the SE couldn’t be sold in European Union countries now that phones there are required to support USB-C. 

This makes a new, 2025 entry-level iPhone not only welcome but also necessary for Apple’s success this year. It should allow Apple to re-enter markets like the EU with a lower-priced iPhone option while providing a device that feels new enough for cost-conscious shoppers who want to get a longer-lasting smartphone before an inevitable creep in prices.

The iPhone 16E is a big opportunity for Apple Intelligence

Apple Intelligence, the company’s set of AI features, appears to be driving Apple to refresh its entry-level devices with more-powerful hardware to increase adoption. This already includes the new $499 iPad Mini

, which comes with an A17 Pro processor — the same as the one in the iPhone 15 Pro — and the relaunch of the Mac Mini desktop computer, with a $599 model that comes with 16GB of memory.

Apple adopted the same strategy with the iPhone 16E. It gave the phone an A18 processor that can run Apple Intelligence, and it pulled back other features to hit a lower cost, like going with a single rear 48-megapixel camera paired with a 12-megapixel selfie camera. Apple is forgoing the Dynamic Island, which features prominently in the rest of the company’s current iPhone lineup, and it omitted faster MagSafe wireless charging and went with the slower 7.5 Qi wireless charging seen on the last iPhone SE (the 16E’s USB-C port charges at 20-watt speeds). 

In exchange for those compromises, the iPhone 16E has an enhanced Siri assistant, Visual Intelligence, generative emoji, text editing tools and ChatGPT integration in Siri. And in a nice plus, the iPhone 16E includes the Action Button that can be customized for a number of shortcuts.

In European Union countries, the iPhone 16E will be the cheapest phone Apple sells, at 699 Euros (thanks to its use of USB-C). Currently the 849 Euro iPhone 15 is the most affordable phone Apple sells in the EU, because it’s the first model to include a USB-C port.

Apple’s lower-cost focus arrives just as tariffs loom

Apple’s refreshes of its entry-level iPhone have had a knack for arriving at turbulent economic moments. In April 2020, the company launched a refreshed, $399 iPhone SE during the early throes of the COVID-19 pandemic. According to Counterpoint Research, that phone, alongside the iPhone 11, helped sustain Apple during a time when smartphone sales were expected to decline.

And now in 2025, a new 10% US tariff on goods from China could mean a corresponding increase in the cost of electronics. That tariff, along with other rising costs expected for groceries and other goods, may lead families to take a more conservative approach to their personal budgeting.

This makes for a particularly opportune launch of the iPhone 16E, as a more affordable phone option that will get years of iOS software updates. But with the iPhone 16E launched at a price that’s well over $500, in some ways we’re already seeing this price creep on the entry-level side of Apple’s iPhone portfolio. The $429 iPhone SE, from 2022, is no longer for sale on Apple’s website, meaning that $599 is now the lowest you can spend for a new iPhone. If you want an iPhone for less, your only options going forward are in the used and refurbished market. 

This also means that Apple’s new iPhone 16E faces competition from Android phone rivals like the $650 Samsung Galaxy S24 FE, the $600 OnePlus 13R and the $499 Google Pixel 8A. All three of these reflect their manufacturer’s own take on the same strategy Apple used with the iPhone 16E — they offer access to just enough power for apps and AI, but certain hardware features have been scaled back to allow for a lower price. 

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Apple needs to refresh its entry-level iPhone more often

Apple’s record of providing consistent options for budget-minded customers has been sporadic at best. Samsung, Motorola and Google release new lower-priced phone options every year, while Apple’s multiyear approach takes its entry-level phones to the verge of stagnation.

The 2022 iPhone SE’s lack of AI support and a USB-C port for the EU were likely driving factors for Apple releasing the iPhone 16E — more than actually serving a market need. And by launching the 16E at a price well above $500, Apple certainly isn’t aiming it at the truly price-conscious folks who want a new phone for the lowest-possible cost.

The name change from iPhone SE to iPhone 16E might indicate a willingness from Apple to iterate on its entry-level phone more often, but that isn’t guaranteed. Way back in 2013, Apple’s $549 iPhone 5C presented a similar lower-cost alternative to that year’s iPhone 5S, but Apple didn’t follow that up with annual refreshes. 

If Apple did iterate more consistently on the entry-level side of its iPhone lineup, it’s quite possible the company could dominate the more affordable end of the market. Instead, Apple cedes this space to Samsung, whose $200 Galaxy A models often take a spot in Counterpoint Research’s list of the top five best-selling phones overall in the US. For instance, in September 2024, the $200 Samsung Galaxy A15 5G places fifth, with the top four spots all occupied by iPhone models that cost $699 and up.

Whether Apple wanted to refresh its entry-level iPhone or simply needed to update it, the iPhone 16E could be the ideal option for people who “just want an iPhone” with modern features for hundreds less than Apple’s current flagship models.