By Angela Palumbo

Apple announced its latest, lower-priced iPhone on Wednesday: the 16e. The lower-cost product could help increase sales of the smart device around the world.

The new smartphone's price starts at $599 and will be available for pre-order on Feb. 21 and in stores on Feb. 28. Apple said the iPhone 16e will offer the company's AI software Apple Intelligence and be powered by the A18 chip.

That could help increase sales. Apple previously noted that markets where Apple Intelligence has been rolled out have outperformed markets where it hasn't yet.

Apple also said that the 16e will include the new Apple C1, the first cellular modem designed by Apple. This news comes after investors have been waiting for updates on Apple's partnership with Qualcomm, which has been designing modems for iPhones.

Apple's cheaper iPhone SE line was originally released in 2016 and hasn't been updated since 2022. The 16e suggests a new strategy for the name of Apple's lower-priced models.

Apple shares were trading around the same level they were before the company announced the iPhone 16e. Shares were down 0.4% on to $243.56.

iPhone sales make up most Apple revenue, and that means investors want to see improving trends for the smart device. Demand has been under pressure. The company reported $69.1 billion in first-quarter iPhone sales on Jan. 30, which was down 1% from a year ago and missed analyst estimates of $70.7 billion. Apple also saw Greater China revenue drop 11% from the previous year.

China has been a difficult market for Apple as competitors like Huawei take share. Not only are iPhones expensive, but Apple Intelligence -- the company's artificial intelligence software -- isn't available globally yet. Investors believed that Apple Intelligence would boost demand for iPhones and lead to a massive upgrade cycle to new devices, but with the prolonged rollout of the software, that hasn't happened yet.

The 16e could help. It's a more bare-bones version of the iPhone compared with the latest models and costs less than the $799 price tag that the base iPhone 16 model carries. But the 16e is more expensive than previous SE models. The latest SE model started at $429.

Write to Angela Palumbo at angela.palumbo@dowjones.com

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February 19, 2025 11:30 ET (16:30 GMT)

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