Apple to launch new lower-cost iPhone to capture a broader market

People walk past an Apple store in London, Britain, Jan 13, 2025. REUTERS/Isabel Infantes

Apple is set to launch its latest budget iPhone model on Wednesday as it looks to grab a bigger share of the mid-range smartphone market and fend off competition from rivals such Samsung 005930.KS and China's Huawei.

The fourth generation of the lower-cost model, so far known as iPhone SE, will take on popular Android smartphones at a time when consumer electronics makers are looking to add artificial intelligence tools into their devices.

The current-generation of iPhone SE, released in 2022, is available at $429 and the latest version is likely to be priced at a premium to the outgoing model. The iPhone 16, launched in September, starts at $799 for the base variant.

"If the SE 4 offers meaningful upgrades in design, performance, and AI features, it could reinvigorate its market appeal and strengthen Apple's position across different price segments," Counterpoint Research senior analyst Varun Mishra said.

Apple late last month forecast strong sales growth signaling that the company will recover from a dip in iPhone sales as it rolls out artificial intelligence features in the coming months to more regions and languages.

However, analysts have been cautious about the sales boost such tools could provide, as Apple's AI features are set to be rolled out in phases in some regions on its latest iPhone 16 line-up and the iPhone 15 Pro model.

The SE model's sales as part of total revenue for iPhones has dropped from 10% from its introduction in 2016 to about 1 percent last year, according to Counterpoint Research.

This year's update is expected to revamp its slab-design, ditch the physical home button and introduce its FaceID feature, apart from camera and processor updates to support AI features, according to analysts and media reports.

The SE model would be the last among iPhones to adopt the USB Type-C port for charging, a departure from its proprietary Lightning connector.

Apple has already discontinued the current SE and iPhone 14 in the European Union as the products do not conform with local laws requiring USB Type-C charging standard. The latest SE model would let it return to the EU.