Well, of course SE 3 didn't sell as good as SE 2 (whooping 14% at launch), since for most people it was basically the same phone as the SE 2 they already had. Most probably wanted to wait for SE 4, which turned out to be 16e, so it's not surprising to see some of the SE 2 crowd finally moving on to the only "SE" available phone in Apple's 2025 lineup - the 16e. 2% increase is very small. It just proves that the 16e is just bad value for money, too big and not really worth it for those who still use SE 3, or 12 Mini, or 13 Mini.
I see lots of handwaving excuses there.
Anyhow, since you didn't seem to understand, I'll explain. it. The point is the 16e isn't designed to generate huge sales numbers. It is designed to push people up the sales ladder like they've done with their September releases in the past. The SE was an odd one out, a vastly inferior phone, but bargain basement priced (for Apple). The SEs were never very good. They were just really cheap (for Apple).
To accomplish this, what they've done with the 16e is designed a much, much better phone than any of the SEs, but consequently have pushed it up the price ladder, bringing it closer to the iPhone 16. So now people looking at the 16e will also look more seriously at the 16, because there is only a US$200 price difference. The difference in price between the SE3 and the iPhone 13 was a whopping $370, so of course that would push sales of the SE 3. But it was still a crappy phone for its 2022 release date.
The did have the iPhone 13 mini, but unfortunately most mainstream users balked at the tiny screen size, especially since it was only $100 less than the iPhone 13. Plus the 13 mini had horrible battery life.
In contrast, the iPhone 16e has comparable battery life to the iPhone 16 Pro Max, which makes the 16e one of the best iPhones ever made for battery life, and it has the same screen size as the iPhone 16. It also gets the latest SoC, OLED, and Apple Intelligence, yet costs $200 less. The 16e looks and feels like a modern phone, basically only missing MagSafe (which the SEs didn't have either but which can be remedied by a $10 MagSafe case) and the wide angle lens.
From a consumer standpoint, this line up makes perfect sense to me, the 16e is a cheaper stripped down iPhone 16 released in early 2025, to complement the ladder of the iPhone 16 series released in fall 2024. Sure pricing could be better, but that doesn't take away the fact that from a technical standpoint, the 16e is very good, and better than any of the SEs ever were for their time.
$599 Good - iPhone 16e 128 GB
$799 Better - iPhone 16 128 GB
$899 Better - iPhone 16 Plus 128 GB
$999 Best - iPhone 16 Pro 128 GB <-- I think this should start at 256 GB
$1199 Best - iPhone 16 Pro Max 256 GB <-- I think this should start at $1099*
*Even better would be to shift the entire ladder down $100, but that ain't gonna happen.