Apple's (NASDAQ:AAPL) next iPhones are expected to launch this coming fall, with two form factors believed to debut. But there's uncertainty whether or not the 4.7-inch and 5.5-inch models will launch at the same time, and the latest rumors have the larger device experiencing delays -- which could push a launch into 2015.
Why the delay?
The latest delay rumors come from noted KGI Securities analyst Ming-Chi Kuo saying component delays for the in-cell touch panel could push the launch back. Here's what Kuo had to say an investor note:
"Indeed, these problems will likely be even more complicated with a larger size. In addition, from a technical perspective, we don't expect sapphire cover, used for the first time on the 5.5-inch model, will easily pass the drop test near term. We are conservative about 5.5-inch iPhone launching by end-2014."
He thinks if a 5.5-inch model does launch in 2014, it'll come after the typical September to October iPhone launch time frame and that shipments will be lower than 15 million to 20 million.
But Kuo isn't the first to predict a delayed launch for the larger iPhone. Earlier reports said that battery issues and display technology could push back the 5.5-inch device.
That's lead many to believe Apple will have a limited supply of the larger iPhone at launch time. MacRumors reported that a few weeks ago: "Stock of the 5.5-inch iPhone 6 is likely to be lower than the 4.7-inch model, mostly due to the more complex manufacturing of the phone and the need for an increase in production efficiency for the device before the manufacturing volume for it can be increased."
The big picture about a bigger iPhone
Prelaunch iPhone rumors get a lot of traction, but investors should really be focusing on one thing here: the addition of new form factors.
The new phones should satisfy pent-up demand for a larger iPhone, something Apple recently admitted in a slide show in its lawsuit with Samsung. In one of the slides labeled "consumers want what we don't have" Apple showed consumers were drawn to larger devices under $300.
Apple said on another slide that it sees the "strongest demand coming from less expensive and larger screen smartphones."
Apple isn't the only one who sees this pent-up demand though. An analyst at ISI Group, Brian Marshall, thinks that current iPhone users will have a 14% upgrade rate for the larger iPhone 6 devices. That would be higher than the 9% upgrade rate in a typical quarter, according to Marshall's calculations.
I think it's very likely Apple will release a 4.7-inch iPhone this fall, and at least announce a 5.5-inch device at the same time. That should be enough to push consumers to tap into pent-up demand for a larger iPhone, and satisfy those who want an even bigger screen that one is on the way. Investors shouldn't get hung up on the timing a 5.5-inch device launch, as a 4.7-inch form factor will likely be the more popular device size, and consumers who want something larger will get what they want just a few months later.
Editor's Note: A caption was removed from the image above to improve the clarity of the analysis provided. The Fool regrets the error.