iPhone 16e iPhone launched in 2007 for $499. How is $599 a budget phone?

[TgeekB]

Interesting conversation and viewpoints.
No one is forced to purchase the 16e. Let’s see how well it sells and who purchases it before chastising it. Apple has a pretty good track record so I imagine they have a very good resin for this particular model.

 

[ZiBart]

It may have something to do with when prices are set.

The 16e launched this month and so far, the USD to CAD exchange rate has been in the $1 USD = $1.42 to $1.47 CAD range. Therefore, $599 USD (starting price of 16e in U.S.) would range from around $851 CAD to $881 CAD. Being above $850 CAD, they made the price $899 CAD.

Back in October when the new M4 Mac mini launched, the USD to CAD exchange rate was in the $1 USD = $1.35 to $1.39 CAD range. Therefore, $599 USD (starting price of M4 Mac mini in U.S.) would range from around $809 to $833 CAD. Being below $850 CAD, they made the price $799 CAD.

Just a theory.

Most likely but they are also using a historic peak and adding a buffer on top. Based on the past 10 years, these peaks maybe happened two other times for a couple months. Most of the time it settles between 1.2 to 1.35. If they had to, i would have used the current rate without the buffer and price it at 849 cad. Or better, take the historic avg of the past 5 years. I always considered budget iPhones as used ones. This aint it. Its just another model in the lineup that squeezes more from the return on investment of the notch design and all the manufacturing investments they put into it but with AI. They could have saved all that money on this release by bumping up the RAM on the 15 and adding AI.

 

[webkit]

Now compare it to median wages which have barely risen.

Barely risen?? U.S. median household income in 2007 was around $50,233. In 2023, it was around $80,610. 2024 estimates are around $82,500.

Adjusting for inflation, $50,233 in January 2008 is around $75,600 in January 2025 dollars. $80,610 (2023) and $82,500 (2024 estimate) median incomes both increased MORE than inflation.

And the minimum wage which rose by 10 cents

10 cents?? The federal minimum wage was $5.15/hour when the original iPhone launched in 2007. It is currently $7.25/hour. More importantly, many states have increased their minimum wage a lot more than that. California minimum wage, for example, went from $7.50/hour in 2007 to $16.50/hour today with some cities higher than that. An increase well above the inflation rate over the same period.

A number of states have significantly increased their minimum wages since 2007.

 

[webkit]

Most likely but they are also using a historic peak and adding a buffer on top. Based on the past 10 years, these peaks maybe happened two other times for a couple months. Most of the time it settles between 1.2 to 1.35. If they had to, i would have used the current rate without the buffer and price it at 849 cad.

Not necessarily a historic peak. Also, Apple can't guarantee where exchange rates will go. In the case of the 16e, they may have added a "buffer on top" because the converted price at the time was above $850 CAD (using my previous figures, somewhere between $851 CAD and $881 CAD depending on when price was set) so they went with $899 CAD.

In the case of the Mac mini, the converted price may have been below $850 CAD at the time (using my previous figures, somewhere between $809 CAD and $833 CAD depending on when the price was set) so they went with $799 CAD.

Had the exchange rate put the mini price above $850 CAD at the time (last October), it may have been priced at $899 CAD just as the 16e is. Conversely, had the exchange rate put the 16e price below $850 CAD at time (this month), it may have been priced at $799 CAD just like the mini. However, that wasn’t the case as demonstrated above.

As I said, this is just a theory on my part.

 

[apparatchik]

The OG iPhone didn’t cost $499, that was just for the upfront payment, fully subsidized, 2-year contract when most phones were given to you for free upon contract renewal.

If you bought the OG iPhone without contract it was closer to $1K, which in today’s dollars is around $2K, which was the most expensive phone in the world at the time.

Then again, Apple won’t make a netbook, or a cheap device just for the sake of it. They tried to do a more affordable device they felt comfortable selling, and it came out at $599.

As some said above, the real affordable iPhone is the refurbished / second market.

 

[ZiBart]

Not necessarily a historic peak. Also, Apple can't guarantee where exchange rates will go. In the case of the 16e, they may have added a "buffer on top" because the converted price at the time was above $850 CAD (using my previous figures, somewhere between $851 CAD and $881 CAD depending on when price was set) so they went with $899 CAD.

In the case of the Mac mini, the converted price may have been below $850 CAD at the time (using my previous figures, somewhere between $809 CAD and $833 CAD depending on when the price was set) so they went with $799 CAD.

Had the exchange rate put the mini price above $850 CAD at the time (last October), it may have been priced at $899 CAD just as the 16e is. Conversely, had the exchange rate put the 16e price below $850 CAD at time (this month), it may have been priced at $799 CAD just like the mini. However, that wasn’t the case as demonstrated above.

As I said, this is just a theory on my part.

I get what you are saying but it still doesn't add up to me.

Mac mini Announcement date: October 29th. 2024
Xrate on Oct 29th = 1.38894
599.99 x 1.38894 = 833.35
They chose to go lower at 799.99 and without buffer while the Xrate was trending to go upwards. Even if they used the X rate from the month before, 1.35163 on Sept 29th, 799.99 would still be lower then 810.96, and without buffer.

16E announcement date: February 19th, 2025
Xrate on Feb 19th = 1.42096
599.99 x 1.42096 = 852.56
They chose to go substantially higher at 899.99 while the Xrate is trending to go downwards. A month prior on Jan 19th, Xrate was 1.44792. 599.99 x 1.44792 = 868.74. They are still way higher at 899.99.

I only use the month before rates as a guess. As the only thing we know is the announcement dates and those don't match either. If they used your logic, 16E would be 849.99 to 869.99, and if they used M4 Mini logic, most likely 769.99 to 799.99. Like you say, and I agree, all a theory based on speculation of course. Once the rate goes down to it's normal level, these will be a better buy for Canadians that shop in the US.

So yeah, up here, I feel it's a bit of a rip off for no reason. But ultimately, we will see how the sales go here. I'm guessing Apple will allow this sku to be heavily discounted if sales are mediocre or worse by carriers. Or it will hang around for 3-5 years like the SE without any or much changes and the MSRP will go down as well. Unless Apple chooses to refresh these every year as well, which would be interesting to see.

 

[webkit]

I get what you are saying but it still doesn't add up to me.

Mac mini Announcement date: October 29th. 2024
Xrate on Oct 29th = 1.38894
599.99 x 1.38894 = 833.35
They chose to go lower at 799.99 and without buffer while the Xrate was trending to go upwards. Even if they used the X rate from the month before, 1.35163 on Sept 29th, 799.99 would still be lower then 810.96, and without buffer.

16E announcement date: February 19th, 2025
Xrate on Feb 19th = 1.42096
599.99 x 1.42096 = 852.56
They chose to go substantially higher at 899.99 while the Xrate is trending to go downwards. A month prior on Jan 19th, Xrate was 1.44792. 599.99 x 1.44792 = 868.74. They are still way higher at 899.99.

I only use the month before rates as a guess. As the only thing we know is the announcement dates and those don't match either. If they used your logic, 16E would be 849.99 to 869.99, and if they used M4 Mini logic, most likely 769.99 to 799.99. Like you say, and I agree, all a theory based on speculation of course. Once the rate goes down to it's normal level, these will be a better buy for Canadians that shop in the US.

So yeah, up here, I feel it's a bit of a rip off for no reason. But ultimately, we will see how the sales go here. I'm guessing Apple will allow this sku to be heavily discounted if sales are mediocre or worse by carriers. Or it will hang around for 3-5 years like the SE without any or much changes and the MSRP will go down as well. Unless Apple chooses to refresh these every year as well, which would be interesting to see.

As I've stated, they may use $50 as the cut-off or threshold point. Even if the converted price is $851 CAD, they may go with $899 CAD. Even if the converted price is $849 CAD, they may go with $799 CAD. Depending on how the numbers fall, sometimes Canada "wins" and sometimes Canada "loses."

Using my figures again, because the converted price for the M4 mini may have been somewhere in the $809 CAD to $833 CAD range (all below $850 CAD), they went with $799 CAD. Because the converted price for the 16e may have been somewhere in the $851 CAD to $881 CAD range (all above $850 CAD), they went with $899 CAD.

Same would be true using your October 29 and February 19 figures. Because the converted price for the M4 mini may have been $833.35 CAD (which is below $850 CAD), they went with $799 CAD. Because the converted price for the 16e may have been $852.56 CAD (which is above $850 CAD), they went with $899 CAD.

My theory (and that's all it is) works with both your figures and my figures. Since we don't know when, how, etc. Apple sets prices, it's really all just speculation.

 

[minik]

Not sure how this thread is still opened. US$599 in today money gets one an entry level model, just glad Apple even updated it. One can totally pay less for previous models elsewhere.

 

[CrapShack]

I think iPhone 16E is every bit worth $599 at today's market value, but that's NOT a budget phone in our current day economy. A 16E mini at $499 is needed.

Sadly, the 12/13 minis where not successful in the market, so the people have spoken! And they have said: "We have no interest in a phone with less than a 6" screen, so don't even try!" For a 6" phone with any kind of decent feature set, $599 is now entry level. Deal with it. Don't blame Apple, blame the market.

Last month I moved up to a 16 from my beloved 12 mini. I like the 16, but DANG I miss that tiny footprint. When the 16e specs were announced, I found that it weighs only 3 grams less than the 16 and doesn't have MagSafe, which is a deal-killer for me, so the 16 was the right choice for me.

BUT, if I had really needed to save 200 bucks, I would have considered the 16e a screaming bargain @ $599.

 

[SBlue1]

I think iPhone 16E is every bit worth $599 at today's market value, but that's NOT a budget phone in our current day economy. A 16E mini at $499 is needed.

What? Compare the prices of almost 20 years ago... LOL!

 

[Yvan256]

For all the discussions about inflation, most people seem to have forgotten that computers used to get more powerful and cost less every single year. At the very least, these two should cancel each other.

I also think that Apple should forgo their huge profit margins and have lower-priced hardware (including lower priced RAM and SSD upgrades) which they only sell every few years in order to get more users for their online services every year, which have much higher profit margins.

 

[webkit]

For all the discussions about inflation, most people seem to have forgotten that computers used to get more powerful and cost less every single year. At the very least, these two should cancel each other.

As far as tech costs/prices coming down, that is reflected in some current pricing. For example, when the iPhone launched in June 2007 the cost to increase storage was $25 per GB and that's without adjusting for inflation. Today, it's around 78 cents per GB.

The starting price of the original iPhone in June 2007 was $499 and required an AT&T contract. Today, AT&T is offering the much larger 16e for as little as $215.64 ($5.99/month x 36 months) with unlimited plan. Even without adjusting for inflation, the 16e is less than half the price.

I also think that Apple should forgo their huge profit margins and have lower-priced hardware (including lower priced RAM and SSD upgrades) which they only sell every few years in order to get more users for their online services every year, which have much higher profit margins.

Apple markets itself as a "premium" brand and is not necessarily trying to compete in the low end of the market similar to how companies like BMW market themselves as "premium" brands and are not necessarily trying to compete in the low end of the market.

Apple, BMW and other premium brands aren't necessarily looking to have the largest overall market share, they are more focusing on market share and position at the premium level. A premium brand pricing its products too low could cheapen their image and hurt sales and profits of their pricier, higher margin products. Apple seems quite content letting low end Android-based brands have the low end of the market.

 

[Cirillo Gherardo]

I mean who are we really kidding here? There should only be 1 model of iPhone, at 2 sizes, and they should cost $600 and $700.

 

[DukeSilver79]

I don't think it's a budget phone. I think it's the most affordable iphone.

 

[Allen_Wentz]

I think iPhone 16E is every bit worth $599 at today's market value, but that's NOT a budget phone in our current day economy. A 16E mini at $499 is needed.

"Budget phone" is defined by the phone product mix. So yes the 16e is Apple's budget phone. It would not qualify as Xiaomi's budget phone.

 

[TgeekB]

I mean who are we really kidding here? There should only be 1 model of iPhone, at 2 sizes, and they should cost $600 and $700.

And eggs should cost 50 cents per dozen, and a car should cost….

 

[ZiBart]

"Budget phone" is defined by the phone product mix. So yes the 16e is Apple's budget phone. It would not qualify as Xiaomi's budget phone.

iPhone 16E is Apple's cheapest, base or entry iPhone. A budget premium phone if I was forced to use the term. But I would never call the lowest MSRP Mercedes a budget car or a budget Mercedes.

 

[Racineur]

I think iPhone 16E is every bit worth $599 at today's market value, but that's NOT a budget phone in our current day economy. A 16E mini at $499 is needed.

You have it right. Apple doesn't cater to entry level any more. 16e is the entry level of a full line of phone so expensive you'll think twice before buying it and will go for the model above with all the bells and whistles. Good move from Apple but bad move too. Question is who will buy this 16e? Owners of an 11 like me who bought it new 799$ ? Don't think so.

 

[SGSfanboy]

Imma gunna go out on a limb and say Apple didn’t want to price the 16e at this price but was forced to due to potential tariffs that might be placed on components.

 

[bluecoast]

It’s not a budget phone. It’s a mid market phone. When you can get pretty ok android phones for $200-300 apple is never going to sacrifice its margins to compete there.

So the market for the 6e is likely people who are not particularly price conscious but who just want a good reliable modern iPhone.

The kind of people who just point and click and expect a great photo or video out of the box.

The sort of people who have never heard of MagSafe. And if they have they know it’s not great for their pacemakers.

In short - regular people who just want a great iPhone that ‘just works’.

 

[webkit]

Imma gunna go out on a limb and say Apple didn’t want to price the 16e at this price but was forced to due to potential tariffs that might be placed on components.

If that were the case, they may have been better off pricing it lower and then if/when new tariffs became a factor they could've increased the price and try to "blame" the tariffs at that point.

The 16e's much larger size (which typically adds $100 to Apple price) and increased base storage (adding another $50) alone could've brought the price up $150 anyway regardless of the tariff situation. $429 + $150 = $579. Another $20 for all of the features the 16e has over the SE (e.g., increased RAM, better camera setup, better chip, better modem, better battery, increased max brightness, super retina XDR display, Apple Intelligence, emergency SOS via satellite, roadside assistance via satellite, Messages via satellite, crash detection, Dolby Vision, Dolby Atmos, ceramic shield, greater water resistance, etc.) seems like a pretty good deal to me.

 

[waquzy]

I think iPhone 16E is every bit worth $599 at today's market value, but that's NOT a budget phone in our current day economy. A 16E mini at $499 is needed.

Ever heard of inflation?

 

[TgeekB]

Definitely not a budget phone. Android (and others) make budget phones. Apple is not in that market, like it or not.

 

[darngooddesign]

$499 was for a 2 year contract.

Yes but that contract gave you unlimited text, calling, and data which was rare back then.

 

[darngooddesign]

you ignore the fact that 2 year contracts were a thing in 2007 so almost no
One was buying an iPhone at the full price.

despite requiring a contract, the original iPhone wasn't subsidized. That came with the 3G.