Apple's iPhone 16e Struggles Against Older Models in India

On Wednesday, Apple pulled back the curtain on the iPhone 16e, a new model that's taking the place of both the iPhone SE and iPhone 14 in their lineup. Priced as the most budget-friendly option in the iPhone 16 series, it's aimed squarely at emerging markets like India.

India, the world's second-largest smartphone market after China, has been a big driver of iPhone sales, with Apple recently breaking into the top five vendors there. Yet, just a week before the iPhone 16e hits the shelves, it's still up in the air what kind of splash this device will make in such a crucial market.

In 2024, India climbed to become Apple's fourth-largest market, following the U.S., China, and Japan. The company shipped a record-breaking 12 million units in a single quarter, marking a 35% year-over-year growth, according to IDC. They're on track to hit 15 million this year.

But here's the kicker: it wasn't the iPhone SE or iPhone 14 that propelled Apple's success in India. Nope, it was the iPhone 15 and iPhone 13 that led the charge, capturing a 6% share of the overall smartphone market in the last quarter of the year.

While Apple's been making strides in India, the iPhone SE has been losing ground. Back in its launch year of 2020, the iPhone SE made up 18% of all iPhone shipments. Fast forward to 2022, and the iPhone SE (2022) only accounted for 6% of shipments, according to exclusive IDC data shared with TechCrunch. Meanwhile, the iPhone 13 was a star, making up nearly 40% of shipments in 2022.

IDC reports that iPhone SE shipments in India and globally dropped to almost nothing in 2023 and 2024. No new SE model was released in either year.

Navkendar Singh, an associate vice president at IDC India, told TechCrunch that about two-thirds of iPhones sold in India are older models.

Android still rules the roost in India's smartphone market, where the average smartphone price hovers around $259. Chinese brands like Vivo, Oppo, and Xiaomi have been making big moves. But when it comes to the $600+ segment, the iPhone reigns supreme, with Samsung's Galaxy phones trailing behind. So, in a way, the iPhone's biggest competition comes from other iPhones.

The iPhone 16e kicks off at 59,900 Indian rupees (about $689) and can go up to $1,034. Compare that to the older iPhone 15, starting at $804, and the iPhone 16 at $919.

In a market like India, where older models keep selling well, the price difference might not be enough to sway buyers from the iPhone 16e to, say, the iPhone 15, especially considering what the budget model gives up in features. Retailers, both online and offline, often slash prices on older models like the iPhone 15 to move stock.

The new features on the 16e might not be compelling enough to draw in new buyers, especially with the popularity of equated monthly installment (EMI) plans, which let users spread out the cost of a high-end device. About half of those buying a premium handset in India ($400-$700) go for this financing option.

"With EMI offers, the real difference would push many towards the iPhone 15 or 16 instead of the iPhone 16e," Singh noted.

Apple's bringing Apple Intelligence to a more affordable price point with the iPhone 16e, which could boost Apple Services revenue down the line. But Apple Intelligence is still in its early stages and won't be available in India until April.

The 16e is the latest iPhone to be assembled in India, along with the rest of the iPhone 16 lineup. But don't expect this to lower the price anytime soon.

Sanyam Chaurasia, a senior analyst at Canalys, thinks the iPhone 16e could pull in customers who might have gone for an iPhone 12 or 13, both of which are still floating around in Indian retail.

He also mentioned that younger users might go for the iPhone 16e instead of the older iPhone 15. "It's a model that caters to a specific crowd," Chaurasia said.

Unlike other emerging markets like Latin America and Southeast Asia, India isn't driven by telco subsidies, making the iPhone 16e a pricier choice for Indian consumers.

The timing of the iPhone 16e's launch might not be ideal either, as it's not during the usual upgrade season, which coincides with Indian festivals later in the year, according to Chaurasia.

"Apple might offer discounts on the iPhone 16e during the festive season, but there'll likely be similar deals on existing models, making them even more appealing than this new one," he concluded.