New A9-Based 4-Inch iPhone Expected to Launch Early 2016 With Apple Pay and Colorful Metal Casing

KGI Securities analyst Ming-Chi Kuo has issued a research note corroborating rumors that Apple will release a new 4-inch iPhone next year, which he believes will resemble an upgraded iPhone 5s and launch in early 2016.

iphone_5s_5c.jpg

While new model may not generate huge sales, Apple still has good reasons to launch. These are: (1) still-existing demand for 4-inch smartphones. We estimate 15-17mn 4-inch iPhones will be shipped in 2015. We estimate the new 4-inch model will account for 8-9% of total iPhone shipments in 2016F; (2) expected price of US$400-500, with the aim of penetrating emerging markets and consumers on smaller budgets; and (3) adoption of NFC will support Apple Pay, benefiting the ecosystem.

Kuo expects the new 4-inch iPhone to have an A9 chip manufactured by both TSMC and Samsung, 2.5D cover glass with curved edges like on the iPhone 6s, NFC for Apple Pay, metal casing with at least two to three color options, and identical camera specs to the iPhone 5s -- an 8-MP rear-facing camera and 1.2-MP front shooter.

Kuo forecasted that full-year shipments of the new 4-inch iPhone will reach 20 million units, with production beginning in the first quarter of 2016. The research note said the new 4-inch iPhone could be priced at between $400 and $500 in the U.S., which would be $149 to $249 cheaper than the 16GB iPhone 6s.

The analyst also reaffirmed that the iPhone 6s may not outsell the iPhone 6, with a possible 30%-40% decline in quarter-over-quarter shipments, based on recently slowed orders within the supply chain. Kuo believes the new 4-inch iPhone could help the slowdown for suppliers.

Recently slowed iPhone 6s orders validates our prediction six months ago that the model may not outsell iPhone 6, potentially resulting in the supply chain returning to a normal cycle starting 1Q16F, and with shipments declining 30-40% QoQ. While the new 4-inch iPhone may not catalyze shipments, it should still help mitigate slow seasonality for suppliers and a negative impact on share performance. This would also in turn raise investor awareness of the Apple supply chain.

Kuo added the iPhone 7 will enter mass production in the second quarter of fiscal 2016.

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Top Rated Comments

zed1291 Avatar
87 months ago
If true, this will be THE iPhone for all those who still gripe about the iPhone 6 models being "too big"... a chance for those apparent multitudes to put their money where their mouth is. It will be interesting to see how many "first world" units sell vs. the bigger-screen iPhones. Will some? Sure. Some 3" iPhones would sell too as would some 6.5" iPhones if Apple rolled either out.

The question is will many sell (other than in countries where the price is the most key variable in choosing this one over the larger-screened iPhones)? It looks like we may get to find out.

And, IMO, that's great. Choices are good. One (or two) size(s) does not fit all.
I am one of the people who wants to see a new 4" iPhone. But not getting this phone won't mean in not putting my money where my mouth is. I want the newest iPhone in 4", not some repackaged iPhone from 2 years ago.
Score: 27 Votes (Like | Disagree)
zed1291 Avatar
87 months ago
How can there be a demand for a phone with a .7 inch smaller screen? Doesnt seem worth it , why not just reduce the bezel on the next iphone
Because 4.7" is way too big. I hate reachability and I never want to have to use it again.
Score: 22 Votes (Like | Disagree)
macduke Avatar
87 months ago
If it has an A9, don't expect it to be $150-250 less. Maybe $100 less, especially if they skimp on the camera and 3D Touch. It's too bad, however, that those who are willing to pay but need a smaller device can't get the best iPhone out there. Just like 6s users are stuck with worse video than the 6s Plus owners who have great stabilization, even though there is no physical reason they couldn't have added it. The size of our hands should not dictate which features we are allowed to use. Apple should be ashamed for denying features based on accessibility, which they usually champion for. Especially if the 4" size is seriously limited. Users with smaller hands (including many more women than men) should not be discriminated against in this way. Just charge the same as you always did for 4" devices. The market can withstand it—they did before!

Just to be clear, I'm perfectly happy with my 4.7" 6s. But I know many people, especially women who refuse to upgrade because they don't want to use a "big phone", even though to you and me the 6s is not big. As someone who does UX design as a big part of their job, I'm always having to put myself into other people's shoes. It just plain sucks for people who used small phones for years and now have to stretch and balance and try not to drop their phone just because big phones are currently trendy. Reachability helps to a certain extent—but it doesn't make it easier to hold and it doesn't make it suddenly fit back inside girl jeans.
Score: 20 Votes (Like | Disagree)
0815 Avatar
87 months ago
Not sure about the source's reliability, but there is a market for a "cheaper" 4" iPhone for sure ...
skip the cheap ... there is a market for a 4'' iPhone. While I am not in that market (I love my 6s+), I know enough people that want a 4'' phone with the latest technology, not yesterdays technology.
Score: 14 Votes (Like | Disagree)
StudyFlo Avatar
87 months ago
So, where's the flood of pixelated pictures of new parts for this handset?
Score: 11 Votes (Like | Disagree)
Corrode Avatar
87 months ago
For a while I thought I didn't need or want a bigger phone but since having my 6s, I don't think I could go back to 4". (Insert size joke here)
Score: 10 Votes (Like | Disagree)

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