Apple on Wednesday announced a new budget smartphone, called the iPhone 16e, which the tech giant hopes will lift its handset sales. Apple stock was little changed on the news, which was widely expected.
The Cupertino, Calif.-based company said the iPhone 16e packs a lot of cutting-edge technology into a low-cost device. It replaces the third-generation iPhone SE and features a revamped design and improved technical specs. The iPhone 16e also is capable of running artificial intelligence applications, branded Apple Intelligence.
Wall Street analysts say the new iPhone should help Apple better compete in more price-sensitive markets, such as China.
In its fiscal first quarter ended Dec. 28, Apple's iPhone revenue fell 0.8% year over year to $69.14 billion. Sales were particularly weak in China. But the company noted that iPhone sales grew in markets where Apple Intelligence features were available.
The iPhone 16e runs on Apple's A18 processor and includes the first cellular modem designed by Apple, the Apple C1. It sports improved cameras and adds satellite communications features for when users are outside of cellular and Wi-Fi coverage.
Analysts say the device should have higher margins since it uses an in-house modem rather than one from Qualcomm.
The new handset will be available on Feb. 28 with preorders beginning Friday. It starts at $599, vs. the cheapest current iPhone 16 handset at $799.
On the stock market today, Apple stock rose 0.2% to 244.87.
"The launch could be an incremental tailwind for Apple, replicating prior cycles of SE shipments," Evercore ISI analyst Amit Daryanani in a report Sunday. The most recent iPhone SE came out in 2022.
Apple stock is on the IBD Tech Leaders list.
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