Rumors have been floating that Apple will introduce a new iPhone with a 4-inch screen as early as next month. How much money would the company generate from such a phone? One analyst has looked into his crystal ball.
Apple could snag $5.5 billion in revenue from a 4-inch iPhone this year, RBC analyst Amit Daryanani projected in an investors note released Wednesday and picked up by AppleInsider. Daryanani thinks Apple would sell more than 10 million units of the new phone. Assuming the smaller phone would steal some buyers away from larger iPhone models, the final tally would be 10 million units in additional sales, he said.
Though $5.5 billion sounds like a healthy number, it would be but a tiny slice of Apple's overall revenue for the year. The phone would have just a "modest positive impact" on Apple's bottom line this year, Daryanani said, adding just 2 percent to its fiscal year 2016 earnings.
Apple and other phone makers have been struggling to cook up new devices that can wow customers again. For its last quarter, the Cupertino, California-based company reported essentially flat iPhone sales, as many major markets have become saturated with phones.
While a smaller, lower-priced iPhone is hardly an innovation, the device could rev up demand in developing countries such as India where budget-conscious consumers have been turning to cheaper phones from Samsung and other vendors.
A 4-inch iPhone could persuade more people to upgrade their older iPhone 5C or 5S models, Daryanani said, specifically citing India as one market that could benefit Apple with consumers adopting the new phone. India is the fastest growing smartphone market in the world, but Apple takes home just a 2 percent cut of that market with its premium-priced iPhones.
In December, Apple lowered the prices on its 4.7-inch iPhone 6S and 5.5-inch iPhone 6S Plus in India to try to revive demand following the launch of the phones in October. The company also cut the price of the 4-inch iPhone 5S to draw in more Indian buyers.
This week, Apple stopped selling the iPhone 4S and 5C in India, The Economic Times reported on Tuesday. The goal for now is to position the iPhone 5S as the most affordable and entry-level model for the country, a senior executive, who is a trade partner of Apple, told the Times.
No details are known for sure about the 4-inch iPhone -- which could be coined the iPhone 6C, iPhone Mini, iPhone 5E or iPhone 5SE -- or even if Apple will introduce one. Reports say the phone would launch on March 15 and start selling on March 18 (see update note below). The phone would borrow the same processor, camera and curved glass edges used in the iPhone 6 lineup. The price would be the same as the iPhone 5S, though the cost would vary by region.
Apple did not immediately respond to a request for comment.
Update, February 27 at 3:41 p.m. PT:Recode is reporting that Apple's product event will happen the week of March 21, and Buzzfeed is reporting that March 21 is the actual day the event will take place.