Apple has launched the budget smartphone model 'iPhone 16e'. This marks the release of Apple's budget smartphone after three years since the unveiling of the 'iPhone SE3' in 2022. The iPhone 16e is priced at around 900,000 won, which is more affordable than previous iPhones, yet it features the artificial intelligence (AI) function 'Apple Intelligence', similar to higher-end models. It is also the first in the series to be equipped with a self-developed 5G modem chip.
Apple is expected to aggressively target the global mid-range smartphone market with the iPhone 16e. However, there are projections that its relatively high price might prevent it from attracting significant interest in the mid-range market.
◇ First application of AI function and self-developed modem chip… Korean launch price is 990,000 won
On the 19th (local time), Apple held a launch briefing for the iPhone 16e. Although Apple has referred to its budget model as 'iPhone SE' until now, it has changed the name to 'iPhone 16e' this time. Apple introduced the iPhone 16e as "a powerful new member of the iPhone 16 lineup." The design has been improved with the removal of the existing home button and support for Face ID. The previous iPhone SE series had a home button. The processor is equipped with the A18 chip found in the iPhone 16 series, allowing it to run the same applications and games as higher-end models.
The modem chip applied is Apple's first self-developed 'C1'. The modem is a component that helps devices connect to mobile communication networks. Apple has used Qualcomm's modem chips until now. The iPhone 16e also introduces a USB-C charging port in accordance with European Union (EU) regulations. Additionally, it features a 6.1-inch organic light-emitting diode (OLED) display, a single 48-megapixel rear camera, and 8GB (gigabytes) of RAM.
A function button has also been added. The function button is currently available only on the iPhone 15 Pro lineup and the iPhone 16 series, located at the upper left side of the device. Pressing and holding the button allows quick access to frequently used functions such as silent mode, camera, flashlight, recording, and translation.
The official launch price in Korea starts at 990,000 won for the 128GB model. This is 260,000 won cheaper than the iPhone 16 (starting at 1,250,000 won), but 400,000 won more expensive than the iPhone SE 3 (starting at 590,000 won). Korea is included once again as a first launch country after the iPhone 16. Pre-orders will be accepted from the 21st, and official sales will start from the 28th. Support for Korean in Apple Intelligence is expected to begin in April.
◇ 'iPhone revenue decline' Apple intensifies mid-range market targeting… It may be overlooked due to high prices
Apple's iPhone sales revenue has recently been declining. The iPhone is a flagship product that accounts for half of Apple's total revenue. Last year, Apple's total revenue increased, but iPhone revenue fell to $69.14 billion (approximately 99.6 trillion won), a decrease of about 1% from $69.7 billion (approximately 100.4 trillion won) the previous year. The disappointment over the lack of AI features in the iPhone 16, launched in the fourth quarter last year, is believed to have affected performance.
Total revenue in China, Apple's largest market, also decreased by 11.1% to $18.51 billion (approximately 26.67 trillion won). This is attributed to a growing trend of patriotic consumption in China, boosting sales of local smartphones, including Huawei.
Apple aims to rebound by targeting the mid-range market. Currently, the smartphone market is expanding primarily with mid-range products. According to market research firm IDC, the global smartphone market size based on shipment volume increased by 6.4% compared to the previous year. Looking at individual companies, Xiaomi, a Chinese manufacturer focusing on mid-range products, saw its shipment volume increase by 15.4%, while Trensition and Oppo grew by 12.7% and 1.4%, respectively. In contrast, Apple, which primarily focuses on high-end products, experienced a decline of 0.9% in shipment volume during the same period, and Samsung Electronics saw a decrease of 1.4%.
Apple also has a necessity to reduce expenses through in-house chipset development. This can lower production costs and reduce dependence on specific suppliers, enhancing negotiation power over component prices.
With the introduction of a budget iPhone equipped with high-performance AI, competition in the mid-range smartphone market is expected to intensify. Samsung Electronics has been expanding the use of AI in its mid-range products since last year. It applied AI features to its budget model 'Galaxy S24 FE' released in September last year. Chinese manufacturers like Huawei, Oppo, and Vivo are also applying AI to inexpensive smartphones priced under 1 million won.
However, evaluations suggest that the iPhone 16e, with a price close to 1 million won, may not significantly stimulate consumer sentiment in the mid-range market. Generally, the price range for mid-range smartphones is between 100,000 won and 600,000 won. The U.S. IT media PhoneArena noted, "It is a product that emerged instead of the inexpensive SE model, but it could be disappointing for budget-conscious buyers," adding, "This is not a budget smartphone."