Apple is developing a budget Mac laptop to target students, businesses, and casual users, with a launch planned for the first half of next year. The device, code-named J700, will be priced below $1,000 and feature an iPhone-class processor and a smaller LCD screen. Apple’s Mac sales were strong last quarter, driving optimism for the holiday season.

The budget Mac will use less-advanced components to keep the price low, a departure from Apple’s current pricing strategy. The laptop is now in active testing and production with overseas suppliers, and it marks the first time Apple will use a smartphone chip in a Mac. Internal testing shows the chip outperforms older Mac-specific processors like the M1.

Apple’s cheapest Mac, the M4 MacBook Air, currently sells for $999, or $899 with a student discount. Despite declining to comment on the new laptop, Apple’s strong Mac sales last quarter and optimistic projections for the holiday quarter suggest a positive outlook. AAPL stock is currently trading at $270.43 on the NasdaqGS, up 0.59%.

Read more at Nasdaq: Apple Plans Sub-$1,000 Mac To Compete In Low-Cost Laptop Market