Although Apple's (NASDAQ:AAPL) current-gen versions of its signature iPhone line -- the iPhone 6 and iPhone 6 Plus -- continue to rack up sales to the tune of nearly 140 million units over the past two fiscal quarters, that doesn't mean that Apple's not working on improving the product. According to a report from Bloomberg, Apple's already started working on the next version of its iPhone, going into volume production next month.
And while we're all unsure of the name, the conventional naming nomenclature for phones has been to follow a number change (i.e., going from the iPhone 5s to iPhone 6) with a letter change (i.e. the upgrade from the iPhone 5 to the iPhone 5s), leading me to think the models will be named the iPhone 6s and iPhone 6s Plus.
Starting to sound like a letter-addition year
Again, we don't know what Apple will name the new unit, but it's certainly starting to sound like this will be a letter upgrade more so than a number change.Generally, a number change represents a rather major overhaul, while an off-year letter change generally provides a processor upgrade and user experience upgrade. And Bloomberg confirms what others have been reporting for months: Apple's next iPhone user experience upgrade appears to be Force Touch technology, which can tell how much force a user is exerting on the screen.
Furthermore, Bloomberg notes that final assembly is expected to be smooth, as the next phone will be very similar to the current-gen unit. That's dissimilar to big differences, mainly in form factor, between the iPhone 5s and the iPhone 6 or between the iPhone 4S and iPhone 5. In fact, if Bloomberg's reporting is correct, Apple fans may have to bid adieu to smaller-sized iPhones as the iPhone 6 clocks in at 4.7 inches while the iPhone 6 Plus measures 5.5 inches.
Bye-bye, 4-inch screen?
While focusing on the inclusion of this new-to-the-iPhone Force Touch technology, as Apple Watch and some Macs already have the functionality, Bloomberg notes that the newest iPhones will be "in the same 4.7-inch and 5.5-inch versions as the current iPhone 6 and iPhone 6 Plus devices." Considering Apple generally keeps only two generations of its iPhone in inventory, this points to a loss of the smaller 4-inch form factor that Apple last used with the iPhone 5s and iPhone 5c.
For investors, Apple's discontinuing the smaller models should be a positive, at the expense of consumer choice. Last year, Teardown.com found that Apple's bill of materials from the smaller-screen iPhone 5s to the iPhone 6 was 7% more expensive while the sale price was increased by nearly 18%. And while Tim Cook has recently thrown cold water on third-party BOM estimates, it's hard to imagine that Apple would upgrade to a less-profitable product willingly.
On the other hand, there are people who prefer a smaller screen. Any time you limit an option, you're taking away consumer choice. If Apple chooses not to release a 4-inch model, it's probably because demand isn't strong enough to justify its continuation, though. In premium smartphones, it seems a 4-inch option is a thing of the past.