Why Apple Will Make A 4" iPhone Again (iPhone 6c?)

There are multiple rumours claiming that Apple would start selling a 4″ iPhone version again. Different reports are calling it either 6c or the 7c, with the latter being from a China Mobile presentation. The launch date for this smaller iPhone is being said to be April 2016. That’s a bit uncanny given the fact that iPhone refresh cycles have never been around April, in fact the only time we saw an out of cycle iPhone launch was for the Verizon CDMA iPhone. Rumours have also claimed that Apple watch 2 may be coming in March and that’s a big enough stage to roll out another iPhone too right?
iPhone 5s 4-inch Screen
Coming back to Apple launching a 4″ iPhone, I personally think that would happen. The case in favour of a 4″ iPhone isn’t very complicated. But the counter points are valid – the 6 and the 6 plus are doing very well, Android phone makers are under tremendous pressure after Apple adopted larger screen sizes and Cupertino really has no reason to make a smaller iPhone right?
Here are two reasons why I think they would release a 4″ iPhone:

Legacy! Most iPhone users are on a smaller screen:

Apple is nearing sales of almost a billion iPhone units. That’s a crazy amount of phones to be sold. Of course all of those won’t be in use today, but you do get the point that a majority of these billion iPhones were wither 3.5″ or 4″ models. 100s of millions of users have been habituated to them and it is very likely that 10s of million of these would still prefer the 4″ model over the larger screen sizes.
Why alienate those users? Or put another way – why not capitalise on that user base too?

Apple is not new to Cannibalisation:

Remember the iPod touch vs Classic iPods vs iPhone? iPad vs iPhone? iPad Mini vs iPad Air vs iPad Pro vs iPhone? Apple has never feared competition between its own products. Better Apple itself than its competitors. A 4″ iPhone may cut into sales of iPhone 6 or 6 Plus but the overall sales of iPhones even with the overlap would still increase.
Apple wouldn’t mind that, specially given the fact that the whole race between Mobile OSes (ask Windows Phone) is to get more units on the market and balance the supply side of apps from developers. For Asian markets there ARPUs are lower, a cheaper iPhone would mean more install base and thus more apps (think India having more apps for Android and iOS falling behind).

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