iPhone 16e
Not every new product is backed by a masterminded plotting of consumer need and gap in the market, perfectly synergising alongside the strengths and weaknesses of other products in the lineup.
Sometimes, stuff is simply reactionary. Apple probably did market research and found that a slice of its price-sensitive customers would be willing to spend more than the price of an iPhone SE, in exchange for slightly more newer features. That’s essentially the gap the 16e fills. It looks like an iPhone 16, it’s not as good as an iPhone 16, but it’s not quite as pricey. It’s another rung in the ladder that carrier stores can lean on to convert a tempted customer into a sale. Nothing more, nothing less.
The baseline price increase might also be somewhat temporary. Perhaps, next year, Apple will keep around the 16e at $499 and the 17e nestles in at $599.