How do I fix iPhone 16e setup getting stuck at iOS 26.2 update?

Force-restart it:

1. Press and quickly release the volume up button.
2. Press and quickly release the volume down button.
3. Press and hold the side button until you see the Apple logo (this might take longer than 10 seconds).

The operative word here is QUICKLY for the first two buttons, then a long hold for the SIDE button; and try it a couple of times, the timing is a little tricky.

If it doesn’t start with the Hello screen reset it to factory settings: Restore your iOS device to factory settings - Apple Support

When you have the Hello screen start the setup again, then set it up as new, without syncing or restoring and skip over every option until you get to the Home screen. Then go to Settings/General/Software Update and update it.

Finally, restore to factory settings again and do a normal setup.

You can get into your new iPhone without pairing it with your old phone. If that were not the case no one could ever be a first-time iPhone user. So for the moment pretend you are a first time user. Turn off your old phone so it doesn’t interfere. Set it up as if you never had an iPhone before, update it, then reset it and start over pairing it with your old phone.

"How do I fix iPhone 16e setup getting stuck at iOS 26.2 update?: bought new iPhone16e. Cannot set it up as it it keeps getting stuck at the Software Update IOS 26.2 screen."

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iPhone Stuck At an Update:

So, is it rebooting? Or is is just stalled? Either way, see if this fixes your issue: How to Fix an iPhone in a Boot Loop - Apple Community

Logical7 wrote:

I believe the problem is with the old phone even though the error message appears on the new one. It seems that, to transfer data and apps from an old phone to a new one, the old one must first be backed up. Various online articles say you do not have to backup the old phone first but I think this is not true as I suspect this is what is blocking me. My old phone will not backup. When I try it says I do not have enough storage space. ...

So make space on the old phone, concentrate on social media like Whatsapp, even Youtube. Be drastic, create 20GB minimum.

Then Read again the post by Lawrence Finch.

NB Set your forum default sort order to "Oldest" in your user preferences to follow the thread as it was posted.

Logical7 wrote:

.... But I have only 1.8 of the 5 free gb. So not sure why it will not back up. Is there a way to connect the two with a cord instead of just setting the old one beside the new one? Maybe they the transfer will work?

You cannot possibly use the free 5GB icloud for backups. That is for your contacts and calendar. Spend a dollar or two a month on 50GB or 200GB.

You cannot use a cable.

I explained that twice. I’ll try a 3rd time. say NO when it asks to transfer from your old phone. Set up the phone as if you never had any iphone. After setting up the phone WITHOUT transferring from your old phone go to Settings/Genera/Software Update and update to the latest version. Then go to Settings/General/Transfer or Reset Phone and tap Erase All Content and settings.

When that finishes the phone will be back in its NEW state and you can go through the setup process again, and this time transfer your content from your old phone.