rumors

KGI Securities analyst Ming-Chi Kuo has weighed in once again on rumors about a new 4-inch iPhone said to be readying for release in 2016. The well connected analyst says there will be a new, small iPhone, that will resemble an iPhone 5s, and will be available in a number of colorful options.

Kuo: Apple Will Release A9-Powered 4-inch iPhone With Colorful Metal Casing in 2016

The new 4-inch iPhone could be available in multiple color options, much like the iPhone 5c, shown here.

Kuo, via MacRumors:

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 believes the A9 powering the new device will be fabricated by both TSMC and Samsung, and that the device will include NFC capabilities for use with Apple Pay. a metal casing in multiple color options, and will have a camera that is identical to the iPhone 5s.

Kuo believes the 4-inch iPhone will see shipments of 20 million in its first full year, and predicts production will begin the first quarter of 2016. He sees the new device’s price as between $400 and $500 in the U.S., or $149 to $249 cheaper than the 16GB iPhone 6s.

Kuo also noted that the iPhone 6s may not outsell the iPhone 6:

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.

As a side note, Kuo says mass production of the “iPhone 7” will begin in the second quarter of fiscal 2016.