Apple releases iPhone SE "substitute", escalating the battle of AI phones in China.

Written by Tian Zhe

Edited by Su Jianxun

In the early morning of the 20th, at a brief press conference that lasted only 12 minutes, Apple officially released the iPhone 16e.

As the "Youth Edition" model of the iPhone 16 series, the iPhone 16e also features the iOS 18 system, Apple Intelligence, and the A18 chip.

Of course, the iPhone 16e is also somewhat downgraded compared to the standard version. For example, the Dynamic Island has been changed to a "Notch Screen"; the A18 chip is only a 4-core, but compared to the third-generation iPhone SE, the performance of its central processing unit and graphics processing unit has increased by 40%.

(Although there is no Dynamic Island, there is a similar design)

In addition, Apple seems to regard the iPhone 16e as an experimental field and has applied some innovative technologies.

In terms of signal connection, the iPhone 16e is equipped with Apple's first modem C1, which is claimed to be the most energy-efficient of its kind in iPhone history and can achieve a more stable and fast 5G connection.

In terms of battery life, Apple has optimized the internal structure to accommodate a larger-sized battery, enabling the iPhone 16e to play videos continuously for up to 26 hours.

In terms of imaging, the iPhone 16e is equipped with a 48-megapixel two-in-one camera that supports a 2x telephoto function.

It is reported that the iPhone 16e has three storage capacities of 128GB, 256GB, and 512GB, in black and white color options, with a starting price of 4,499 yuan, and it will be available on February 28.

At the press conference, the previously rumored iPhone SE 4 was not mentioned, but judging from the pricing and configuration of the iPhone 16e, it seems to be the incarnation of the iPhone SE 4.

(iPhone 16e)

Exchanging price for quantity, Apple barely boosts sales

One week before the press conference, Apple's CEO Tim Cook revealed on a social platform that it will announce its new family member - that is, the iPhone 16e. As the first low-end model of Apple's digital series, the iPhone 16e is obviously an marketing innovation by Apple.

A similar move by Apple also occurred in 2016. In March of that year, outside the digital series, Apple launched the first-generation iPhone SE. After this new product, which is slightly smaller in size and lighter in weight than the ordinary iPhone, was launched, it increased the market share of the iPhone in the United States and Europe, and once became the best-selling model in the United Kingdom.

(The first-generation iPhone SE)

Although Apple's quarterly net profit set a new high at that time, the lack of innovation and rigid pricing strategy have already caused complaints in the market. Competitors such as Samsung and Xiaomi have led Apple in global sales through a rich product line.

The relatively low-priced iPhone SE reached more users. Cook said at the company's conference call that in the first quarter after the iPhone SE was released, the company added millions of users who bought smartphones for the first time, and the proportion of users who changed their phones also reached the historical peak of iPhone's quarterly sales.

Unlike the booming smartphone market nine years ago, today's Apple phones need to find new sales growth points in the stock market.

Affected by factors such as the macroeconomy and the gradual saturation of the market, consumers' willingness to buy new phones has decreased. According to a report released by research institution IDC, from 2021 to 2023, global smartphone shipments have declined for three consecutive years.

Apple has not been spared. Apple's 2024 financial report shows that the annual quarterly sales of mobile phones fluctuate between 39.296 billion and 69.702 billion US dollars.

In order to increase mobile phone sales, Apple launched the iPhone 16 in September 2024. Compared with the previous generation, the iPhone 16 not only has a 15% improvement in CPU performance, a longer battery life, but also is the first model to be equipped with Apple Intelligence, with intelligent writing tools, image creation, and a more personalized intelligent assistant.

The market performance did not meet Apple's expectations. After the iPhone 16 press conference, Apple's stock price dropped nearly 3% at the opening, and the sales of Apple phones in the current quarter decreased by 4.1% year-on-year.

However, due to the preferential promotion activities that Apple launched in many places around the world, including China and the United States, Apple's sales in 2024 increased by 2.02% year-on-year to 391 billion US dollars, while the net profit decreased by 3.36% year-on-year.

The Chinese market is one of the regions where Apple's mobile phone promotion activities are the most concentrated. In the first half of 2024, Apple reduced the price of the 128GB standard version of the iPhone 15 by 25%; during the "Double Eleven" period, all Apple products participated in the subsidy activities, and the subsidy amount for the iPhone 16 series phones reached 500 yuan; in January 2025, Apple once again reduced the prices of all products.

The reason for this is that Apple is facing the rise of competitors such as Huawei.

Data from market research company Canalys shows that in the fourth quarter of 2024, Apple's smartphone shipments in China declined by 25%. From the perspective of the annual sales in 2024, Apple ranked fourth in the Chinese market sales, dropping one place compared to previous years.

The decline in Apple's revenue in the Chinese market continues. Apple's first-quarter fiscal 2025 earnings report shows that as Apple's third-largest source of revenue, the Chinese market's revenue decreased by 11% year-on-year.

For Apple, how to attract more Chinese users in the future under the circumstances of insufficient product innovation and fierce competition will be a challenge.

Partnering with Alibaba to accelerate the development of Apple's Chinese AI

The sales of the iPhone 16 with Apple Intelligence are mediocre, but in Apple's view, this is because this technology is not yet available in some regions, thereby affecting sales.

Cook once said at the earnings conference call that in countries where the Apple Intelligence technology is available, the sales of the iPhone 16 series are higher.

Currently, Apple Intelligence has been available in some English-speaking countries such as the United States and Canada. At this press conference, Apple reaffirmed that it will launch a multilingual version of Apple Intelligence including Simplified Chinese in April this year.

In fact, Apple Intelligence is developed by Apple in cooperation with OpenAI. Apple has also indicated that it hopes to use AI models provided by other companies.

In order to launch Apple Intelligence in the Chinese mainland as planned, it was recently reported that Apple has been in contact with several Chinese technology companies to cooperate in the development of AI functions.

The news first came out in January this year. At that time, it was reported that Apple was in contact with Tencent and ByteDance to integrate the latter's large models into the national version of the iPhone. With the explosion of DeepSeek during the Spring Festival, the news that Apple discussed the possibility of cooperation with DeepSeek came out.

Apple's AI function cooperation fell to Alibaba. On February 13, at a summit event in Dubai, Alibaba co-founder and chairman of the board of directors, Joseph Tsai, responded to the rumors, saying, "Apple needs a localized partner in China to serve their mobile phone services... In the end, they chose to do business with us."

However, this matter is not over. After confirming the strategic cooperation with Alibaba, it was recently rumored in the industry that Baidu may cooperate to develop an AI search function that processes images and text, as well as improve the experience of the Chinese version of Siri.

Apple's Chinese rivals have taken the lead in applying AI Agent to mobile phones. Xiaomi's "Super Xiao Ai" can hail a taxi and edit pictures according to commands; Honor's "YOYO" intelligent entity can not only recognize voice commands, automatically order takeout for the phone, but also check air tickets and send photos.

Regarding the development progress of AI functions, Apple's internal researchers have noticed that it lags behind the industry's top models by two years. Cook remained noncommittal in the face of the interview, leaving a sentence "Not first, but best".

The countdown to Apple's launch of the Chinese version of Apple Intelligence has started, and the iPhone 16e is about to be launched. Soon, Apple's AI phones will cover the price range of 4,000 - 14,000 yuan. By then, the battlefield of China's smart phone will be more fierce.