Apple is preparing to debut its first budget-friendly Mac early next year, marking the company’s entry into the low-cost laptop market, according to a Bloomberg News report on Tuesday.

Sources familiar with the matter said the new model, code-named J700, is aimed at students, businesses and casual users who primarily browse the web, work on documents or perform light media editing. The device is also expected to appeal to potential iPad buyers who prefer a traditional laptop format.

The upcoming Mac will be priced below US$1,000, Bloomberg said, with Apple opting for less-advanced components to keep costs down. The model is currently undergoing active testing within Apple and is in early production with overseas suppliers.

In a notable first for the tech giant, the new machine will be powered by an iPhone processor rather than a Mac-specific chip. Despite this, internal tests reportedly show the smartphone chip outperforming the M1 processor found in laptops released just a few years ago.

The laptop will feature a smaller LCD screen measuring slightly under 13.6 inches, making it the most compact Mac to date. Apple is expected to pair the device’s affordability with the efficiency of its custom-designed chips to attract users away from Google’s Chromebooks and entry-level Windows PCs.

Currently, the cheapest Mac in Apple’s lineup is the M4 MacBook Air, which retails for US$999, or US$899 with a student discount.

Apple did not respond to Reuters’ request for comment on the Bloomberg report.

In its latest quarterly earnings, the Cupertino-based company reported Mac sales of US$8.73 billion, surpassing analyst estimates of US$8.59 billion. Last month, Apple also forecast stronger-than-expected iPhone and overall revenue heading into the holiday season.

Reuters