The tech giant is rumored to be developing a four-inch version of the iPhone 6S, which could be branded as the iPhone 6S Mini.
"The question is, do they make a 5S and a 5C-type phone or do they make a super powerful four-inch phone?" Sean Udall, CIO of Quantum Trading Strategies and author of The TechStrat Report, told Benzinga. "In other words, do they make it with the same powerful specs as the new phones?"
Udall expects Apple to go the latter route and release a powerful four-inch device if the company can sell at least 10 million units per year. If that is indeed Apple's goal, it may not be too hard to reach.
"[Consumers] want the upgraded specs of the new phone models," he said. "In a sense, I actually think it's a pretty reasonable rumor because it wouldn't be that hard for Apple to do it."
Related Link: 5 Things To Expect From The iPhone 6S, iPhone 7 In 2015
Making Customers Happy, But...
Tech industry expert and analyst Jeff Kagan thinks that many customers would be thrilled to hear that Apple planned to release an upgraded four-inch handset. He doesn't expect the company to do it, however.
"I imagine there will be a market for a phone that's the same size as the iPhone 5," Kagan told Benzinga. "But I can't see Apple doing it. Apple keeps the same-sized phone for two years, [then it] changes."
The irony of this rumor is that it contradicts everything that led to the iPhone 6 and 6 Plus. Before they were unveiled, every analyst said Apple needed to release a larger iPhone. Now that Apple has complied, some analysts are calling for a smaller device.
"The whole problem that we were talking about over the last year was that Apple's display was too small," said Kagan. "It's not too small for me -- I like my iPhone 5. I don't want a phone that's bigger and sticks out of my pocket."
The Pricing Conundrum Strikes Again
If Apple wants to release a new four-inch handset, the company must overcome a dilemma: how much should it cost?
Two years ago Apple had to select an appropriate price for the iPad Mini versus the full-size iPad and the various iPods that were available. This year Apple had to decide how much more it should charge for a 5.5-inch iPhone.
"I think somebody would be crazy to pay as much for a four-inch phone as much as they're going to pay for a 4.7-inch phone," said Udall. "I think that's the only marketing challenge to Apple."
The 4.7-inch iPhone 6 maintained the default pricing of $199 with a contract or $649 without. Apple could have pushed the price up in September when the product was new. Now that the old pricing has been applied, consumers may not be willing to pay more. Thus, the iPhone 6S Mini would have to sell for less than the standard 4.7-inch 6S.
If Apple moves in this direction, it could provide consumers with the low-cost iPhone they thought they were getting with the iPhone 5C.
Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.
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