On Wednesday, Apple (AAPL) announced the launch of the iPhone 16e, a new budget-oriented version of the iPhone 16 that comes loaded with features powered by Apple Intelligence.

This “latest addition to the lineup” was previewed by CEO Tim Cook on X last week. The device will retail at $599 and is set to launch on February 28, offering a more economical choice compared to the iPhone 16’s $799 price and the higher-end Pro, Plus, and Pro Max variants.

The iPhone 16e will feature Apple Intelligence capabilities, which CEO Tim Cook mentioned significantly contributed to record we observed in iPhone upgrades during the first fiscal quarter. Additionally, the device is powered by the same A18 chip featured in the iPhone 16.

According to analysts from Morgan Stanley last week, Apple may ship around 15 million units of this lower-cost model during the 2025 fiscal year. However, this estimate was based on expectations that the new phone would replace the iPhone SE line, priced at approximately $499.

The announcement of the 16e coincides with reports that Alibaba (BABA) is collaborating with Apple to integrate Apple Intelligence into iPhones sold in China. Apple’s submission of AI features developed in partnership with Alibaba is currently under review by Chinese regulatory bodies, a process that may take several months.

During the intraday trading session on Wednesday, Apple’s shares showed little fluctuation. Over the past year, Apple’s stock has appreciated by nearly a third in value.