Apple Releases a New, Cheaper iPhone With AI Features

 

Although it costs $599 more, the iPhone 16e is the first update to the company's cheapest model since 2022.

Apple has added functionality to its most inexpensive iPhone, which has been around for less than a year after launching its artificial intelligence capabilities.

The business introduced an iPhone on Wednesday that will retail for $599 and feature an artificial intelligence system called Apple Intelligence. As it prepares to roll out AI features in additional languages, such as Chinese, Portuguese, and customized English for India, the gadget adds English-language writing tips and notification summaries to the company's most affordable iPhone model.

Both Touch ID and the home button have been phased out of the new phone, which Apple is referring to as the iPhone 16e. Instead, Face ID, a face recognition technology that has been a feature of the majority of iPhones since 2017, is used to unlock the phone.

The iPhone SE has been replaced by the iPhone 16e, the first update to the company's most affordable smartphone series since 2022. Price-conscious consumers, who frequently upgrade to more costly versions the following time they purchase a phone, have been able to purchase Apple's flagship product thanks to the lower models.

At a pivotal moment, Apple is launching the new iPhone. Sales of the company's iPhone have been declining, down 2% from its 2022 top of $205.5 billion. Apple CEO Tim Cook has attributed part of the iPhone's problems on the limited availability of Apple Intelligence, which was only accessible on the company's newest models in English-speaking markets like the US and was disclosed months before it became available. During a call with analysts last month, Mr. Cook claimed that in markets where the iPhone was available, sales were driven by the new A.I. features.

However, according to polls, artificial intelligence hasn't played a significant role in customers purchasing new phones, according to Jeff Fieldhack, research director at market research company Counterpoint Research. According to him, "People are purchasing phones for the same reasons they always have: The phone is getting old and not working, or the battery isn't recharging."

Additionally, Apple's business will gain from the price increase of its entry-level model. The previous iPhone SE, which cost $429, is 40% less expensive than the iPhone 16e. With the raise, Apple could make an additional $170 on each of its most affordable iPhones. That will increase overall sales at a time when the company's annual phone sales have been comparatively steady at around 230 million units.

The price increase follows President Trump's imposition of a 10% tax on all Chinese imports. According to Richard Kramer, a partner at the stock analysis firm Arete analysis, Apple's decision to raise the price of its most affordable iPhone is most likely unrelated to the fact that the company manufactures the bulk of its iPhones in China.

According to Mr. Kramer, "These decisions are made months before action is taken." "At a time when volume growth is fairly moribund, Apple is starting to raise prices across the board."

Increasing Apple Intelligence's accessibility is essential to the company's attempts to repel competitors and boost sales abroad. According to Counterpoint Research, Apple's proportion of smartphone sales in China, its second-largest market, dropped 2.4 percentage points to 15.5% last year as competitors like Huawei gained ground.

The iPhone 15 was the top-selling smartphone in the last three months of last year in India, one of the fastest-growing smartphone markets in the world, according to Counterpoint. Apple's market share in India increased by two percentage points to 11% as a result of the device's popularity.

Apple is launching the C1, its first specially created modem chip, with the iPhone 16e. The chip replaces the Qualcomm modem chips and offers a 5G connection. Since 2019, when it acquired Intel's modem division and resolved a legal dispute with Qualcomm on the chipmaker's license fees, Apple has been working on the chip.

The new modem chip would not contain all of Qualcomm's modems' features, according to Ben Bajarin, CEO of Creative Strategies, a tech research firm, but it would enable Apple to test the part before integrating it into upcoming iPhone models. He claimed that eventually, Apple's own modem will enable wireless connectivity for other Apple devices and enhance the battery life of iPhones.

Will it be available on an iPad? Will it be available on a Mac? How much farther can they push this? "Said Mr. Bajarin."

The iPhone 16e was unveiled by Apple with less fanfare than usual. Mr. Cook explains the new phone in a 13-minute video that the company uploaded to its website. In 2022, it hosted a one-hour event in its Cupertino, California, headquarters to unveil the iPhone SE.