There’s No Longer a Sub-$500 iPhone. Does It Matter?

Yesterday, the cheapest iPhone cost $429 if you wanted to buy directly from Apple. Today? It’s $599. The new iPhone 16e replaced the iPhone SE, giving the aging device a much-needed cosmetic upgrade and power boost, but it comes at a cost. The overhaul is so big that the iPhone 16e is essentially a new class of device in Apple’s smartphone lineup, hence the name change. (Apple didn’t say what the “e” stands for.)

Apple also took this opportunity to cut the $599 iPhone 14 and iPhone 14 Plus from its roster, though it has kept the iPhone 15 and iPhone 15 Plus, which cost more than the iPhone 16e. All of this effectively means Apple no longer sells an iPhone for less than $500. Does it matter? It might not make much of a difference in the United States, where most people purchase phones subsidized through carriers, and globally, there’s a “premiumization” trend where consumers are opting for higher-end phones. First, let’s dig into the details.

The iPhone 16e vs. iPhone 15

These are Apple’s two cheapest iPhones right now. The iPhone 16e has the more powerful A18 processor with access to Apple Intelligence, and the new Apple-designed C1 modem is supposedly so efficient that it enables better battery life than even the iPhone 16 despite the same 6.1-inch screen size. It also includes the same easy-to-replace battery mechanism.

But there are a few reasons to pay a bit more for the iPhone 15 and iPhone 15. The screens are brighter, portrait photos might look better, and there’s a spare ultrawide camera lens. Also, some camera features are available on the 15 series that aren’t on the 16e, such as Cinematic and Action mode.

The iPhone 15 series also features Qi2/MagSafe wireless charging, so you can access a wealth of MagSafe accessories, whereas the iPhone 16e is stuck on the slower and less energy-efficient Qi wireless charging standard. You’ll have to make do with MagSafe cases that replicate the functionality, though it doesn’t improve energy efficiency or charging speed. (Weirdly, maybe Apple should have followed Samsung’s “Qi2 Ready” approach?)

Then there’s the Dynamic Island on the iPhone 15, which is baked into the floating selfie camera bar. It makes use of the camera cutout by letting you access live app activities, like seeing how far away an Uber is or quickly hopping back into the Maps app. This is unavailable on the iPhone 16e, which has a static notch like the original iPhone X.

Finally, the iPhone 15 also has the second-gen ultra-wideband (UWB) chip, whereas the iPhone 16e doesn’t feature it at all—this is what enables you to precisely track the location of nearby AirTags. You can still track AirTags with the iPhone 16e, but the iPhone can’t point out exactly where it is in your vicinity.

By and large, those are most of the differences between the phones. It’s worth pointing out that the iPhone 16e is launching in fewer countries than other models—59 countries to be exact. Apple didn’t share why, but it may have something to do with the new C1 modem, as carriers often need to certify them for use.

The pro move? Stick to a used iPhone 15 Pro, which you can find for roughly $600 these days on sites like Swappa in Good condition, even less if you buy a carrier version. It includes Apple Intelligence if you really want it, plus you get many more extra features.

No More ‘Cheap’ iPhone?

The lack of a sub-$500 iPhone seems like a gaping hole in Apple’s smartphone strategy, but Maurice Klaehne, a senior research analyst at Counterpoint Research, doesn’t think it will affect consumers much, particularly in the US.

He says roughly 10 percent of iPhone sales in America come from Apple Stores, meaning the vast majority of the population purchases subsidized devices from carriers. While Apple may not directly sell older iPhones like the now-gone iPhone 14, these carriers still carry these devices that consumers can purchase for cheaper, not to mention the enticing promotions for newer devices. (Of course, these subsidized phones have caveats in that they’re locked to a network. That’s why we recommend unlocked phones as it doesn’t force you into a contract and allow you to freely switch carriers.)

Globally, there’s far more choice in the sub-$500 smartphone category than there is in the US, especially from Chinese companies. However, Klaehne says there’s a premiumization trend, where consumers are opting to shell out for higher-end devices, whether it’s as a status symbol—Apple is an aspirational brand after all—or for more premium features. This is compounded by an apparent desire for smartphones with generative AI capabilities—a Counterpoint survey found that 59 percent of respondents were open to upgrading to a GenAI phone in 2025—and that number is even higher in the US with 67 percent.

“There’s more of an interest now for these devices especially as we’re getting away from generation one GenAI to AI agents that do more specific tasks for you and are able to be more integrated into your device,” he says.

It all comes back to artificial intelligence. There’s a reason why Apple did not choose to use the iPhone SE branding but include “16” in the name of the iPhone 16e. Apple Intelligence was heavily tied to the launch of the iPhone 16, and naturally, people will expect those capabilities with the iPhone 16e.

While Apple Intelligence is free at the moment, Klaehne thinks it opens up a future where it could add to Apple’s Services revenue stream—Google already offers a subscription tier for phones to access a more powerful model of its AI assistant (along with other perks), and an offering like that seems ripe for Apple and its Apple One plans. Getting capable AI-ready devices into people’s hands now means a larger pool to pull subscription revenue from in the future.

But in the end, if you walk into an Apple Store hoping for a cheap, unlocked iPhone, you’re out of luck. Instead, Apple will try to sway you into the iPhone 16e—it’s $200 cheaper than the iPhone 16 after all. What a bargain.