Apple looks set to expand its lineup of iPhones in the new year with a report that it’s preparing to ship a new phone.

KGI Securities analyst Ming-Chi Kuo, famed for accurate Apple predictions, has issued a research note with details of the new phone, believed to be called the iPhone 6c, which like the now discontinued iPhone 5c will ship with a 4-inch screen.

The phone is said to include 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, but with the same camera specs to the iPhone 5s versus the current models: an 8-MP rear-facing camera and 1.2-MP front shooter.

Like the iPhone 5c before it, the iPhone 6c will also likely be available in a range of colors.

“While the new model may not generate huge sales, Apple still has good reasons to launch,” Kuo said in his research note. “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.”

Demand

While the iPhone 5c was never a huge success for Apple, it did cater to two types of buyers who Apple would be keen on not losing to Android: those looking for a smaller phone and those looking for a cheaper phone.

Speculation about the iPhone 6c first emerged earlier this year, and while no price has been determined, it’s speculated that the phone will likely retail for around the $400-$500 mark, significantly less than the current price of $649 for the base model iPhone 6s.

In an age where smartphones seemingly continue to grow in size, offering a smaller phone may seem to go against this trend, but there are people who prefer smaller phones, let alone those who owned earlier model iPhones and didn’t like the size creep on the later models.

For Apple, it’s all about offering a more diverse range of products to more people in its never ending, global war against the Android onslaught, and this phone can only help in those endeavors.

The new phone is likely to be announced in the first quarter of 2016.

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