The analyst, who is often accurate, says the device "resembles an upgraded iPhone 5s" and may have an A9 processor.
As there is still demand for a 4-inch iPhone, we believe Apple will upgrade this product line. Because the iPhone 5s is more popular than the iPhone 5c, we think Apple is likely to launch an upgraded iPhone 5s. We predict Apple will mass-produce this new 4-inch iPhone in 1H16 with metal casings. In order to make the current iOS 9 or next-generation iOS 10 run smoothly, Apple may adopt an A9 chip for this new phone.
Kuo says the new iPhone won't have 3D Touch support. Apple is projected to ship 20-30 million units of the device in 2016.
Additionally, Kuo says Apple will upgrade the iPhone 7 to a new A10 chip with improved performance. Interestingly, the company may further distinguish between the 7 and 7 Plus models by equipping the 7 Plus with 3GB of RAM and leaving the 7 with 2GB.
Foxconn is said to be the exclusive supplier of the 4-inch iPhone with TSMC exclusively providing A9 chips for the phone and A10 chips for the iPhone 7.
Please follow iClarified on Twitter, Facebook, Google+, or RSS for more updates.