The custom modem in the iPhone 16e lays the groundwork for future Apple projects, as the company intends to use its proprietary modems across future products.

Apple on Wednesday formally introduced its first in-house developed 5G modem that will be used in the company's new $599 6.1-inch iPhone 16e smartphone, aimed at the mainstream audience. The modem is the first fruit from Apple's acquisition of Intel's 5G modem business unit six years ago.

Apple Intelligence’s arrival on a lower-cost iPhone is thanks to one of its biggest upgrades from the SE: the A18 chip (the same processor from the iPhone 16 and 16 Plus ). That makes it Apple’s cheapest AI-equipped model by $300. However, that's quite a bump up from the (now-retired) iPhone SE's $429.

Apple has released a sleeker and more expensive version of its lowest priced iPhone in an attempt to widen the audience for a bundle of artificial intelligence technology that the company has been hop

The iPhone 16e’s not-so-cheap price shows Apple is unwilling to trade margin for sales volume.