Less than a year after introducing artificial intelligence, Apple brings it to the most affordable iPhone.
On Wednesday, the company announced an iPhone that costs $599 and features an AI system called Apple Intelligence. The device prepares to expand these features to other languages ​​in the coming months, including localized English for Chinese, Portuguese and India, and offers notification summary and English recommendations. It brings AI features such as writing to the lowest-priced iPhone models.
The new phone, which Apple calls the iPhone 16E, does not have a phased-down Home button or Touch ID. Instead, the phone will be unlocked with a facial recognition system called Face ID, which is available on most iPhones since 2017.
The iPhone 16E is the company's first update to the lowest-priced smartphone line since 2022, and replace it. Company iPhone SE. Cheap mobile phones have helped Apple put their signature products in the pockets of price-sensitive customers.
Apple is introducing new iPhones at critical times. The company's iPhone business is down 2% from its $200.5 billion peak in 2022, with Apple CEO Tim Cook taking part in the iPhone's struggle against the limited availability of Apple Intelligence. I've chalked it up. It is only available in the company's latest models in English-speaking markets like the US just a few months before it becomes available. In a call with analysts last month, Cook said the company's new AI capabilities have driven iPhone sales in a market where it is available.
But the research shows that AI is not the main reason people are buying new phones, says Jeff Fieldhack, research director at market research firm Counterpoint Research. “People always buy phones for the same reasons they have. They either have no battery charge or their phones are aging and not working,” he said.
Apple's business is also profiting from increasing prices for its introductory models. The iPhone 16e is 40% more expensive than the last iPhone SE and costs $429. This increase means that it is expected to raise another $170 for each of the cheapest iPhones Apple sells. This will increase total sales when the number of mobile phones sold is relatively stable at around 230 million units per year.
A higher price comes after President Trump imposes a 10% tariff on all imports from China. Apple manufactures the majority of iPhones in China, but the decision to raise the price of the lowest-priced iPhone is probably irrelevant, said Richard Kramer, a partner at stock research firm Arete Research. Masu.
“These decisions are made several months before action is taken,” Kramer said. “This is the beginning of raising prices across the range when volume growth is pretty moribund.”
Expanding Apple Intelligence's availability is important to the company's efforts to dodge rivals and increase sales overseas. In China, Apple's second most important market, the company's share of smartphone sales fell to 15.5%, down 2.4 percentage points last year, as rivals like Huawei gained positions.
In India, one of the fastest growing smartphone markets in the world, the iPhone 15 was the best-selling smartphone in the last three months of last year, Counterpoint said. The popularity of the device led Apple to increase India's market share by 2 percentage points to 11%.
With the iPhone 16E, Apple is introducing the first custom-designed modem chip called the C1. The chip provides 5G connections and replaces the modem chips provided by Qualcomm. Apple has been developing chips since 2019, when it resolved a lawsuit against Qualcomm over Chipmaker's license fees and purchased Intel's modem business.
Ben Bajarin, CEO of tech research firm Creative Strategies, said that the new modem chip doesn't have all the features of Qualcomm's modems, but that Apple can now test components before they can be incorporated into future iPhone releases. He said that. Ultimately, Apple's custom modems will improve the battery performance of the iPhone and bring wireless connectivity to other Apple products.
“Will they come to the iPad? Will they come to the Mac? How far can they take this?” Bajarin said.
Apple has introduced the iPhone 16E, which has less fanfare than usual. The company posted a short, 13-minute film on its website, in which Cook describes his new phone. When the iPhone SE was introduced in 2022, the company held an hour-long event at its headquarters in Cupertino, California.
