I have an iPhone SE in a factory sealed package that I bought 18 month ago. If I leave all as is, at what point will the battery no longer be of any use? For example, if I open it it up in 5 years will it need a new battery?

You cannot store consumer lithium batteries for long periods of time and expect them to be useable. 3-5 years is the absolute max. shelf life for any smart phone, tablet or laptop battery. Internal oxidation, and deep discharge when left static like that will ruin them for future use. And honestly, who pen buying replacement batteries, if I can I try to only buy ones within less that y to 8 months from date if manufacture to avoid ones with limited life span and capacity remaining.

Also note that as 5G networks roll out over the next few years, older networks are being shut down. AT&T will shut down its 3G and non-LTE 4G network by the end of 2022, and Verizon is already nearly finished doing so with some theirs (and will be all done by end of this year). “Time capsuling” cellular devices is a loosing gamble in the not-so long run.

There are way too many variables. Usually Apple's manufacturing contractors deliver devices with the battery at around 50% charge because that's the best for long term storage. A rule of thumb is that lithium rechargeable batteries lose around 1% to 5% charge every month, and obviously the absolute amount of charge lost decreases each month in a regular decay.

Even if a device isn't used, I would recommend charging the battery periodically to keep it from getting into deep discharge. After 5 years I would expect it probably wouldn't recover. And there's a chance that if it recovers it's lost a good chunk of its capacity just from regular aging as well as non-catastrophic deep discharge effects.

Michael Black wrote:

“Time capsuling” cellular devices is a loosing gamble in the not-so long run.

They did that on The Orville. I'm frankly rather skeptical that even the electronics would be working after 400 years, let along the battery. I'd expect that a battery would have leaked or otherwise fell apart. At the very least the flash memory would suffer from charge leakage. Maybe not a big deal after 5 years though.

In that case if you don't have anything to connect it to, it can't be activated via cellular communications. But once it's activated, theoretically after decades it should still be working (even without working cellular communications) as long as a working battery can be installed. I would worry about charge leakage of the flash memory, but periodic wear leveling should "refresh" the charge level. Tri-level and quad-level might be worse though because of lower endurance and less margin for error.

To me, it’s more a matter of what would the device connect to 5, 10 or so years down the road. The wonder that was the original iPhone was not a useable “cellular” device barely 10 years after its release. And you know once the carriers get their full 5G in place in the next few years, they will be eager to start pulling the plug on 4G LTE as soon as they possibly can without too much backlash from users - 4G LTE will just be cutting into their rate of investment return on building out the 5G networks, so the sooner they can pull the plug on it, the better from the bean counters point of view.

if you bought it 18 months ago the standard warranty expired 6 months ago.

Most likely, yes.