Another year, another step toward a day that Apple (NASDAQ:AAPL) will soon realize it needs to revamp its iPhone naming conventions. This year saw the release of the iPhone 6s and 6s Plus, the fourth "S" cycle since Apple adopted the tick-tock strategy way back in 2009, with the iPhone 3GS. The numbered system stopped making sense long ago, but each year, it becomes even more untenable. For instance, 2016's presumed "iPhone 7" will be the 10th-generation iPhone.
Yes, I've made this argument before, but the fact still stands that it only becomes more convincing over time, particularly as Apple's iPhone product strategy continues to evolve.
Word on the Street
The latest rumor about what Apple might have up its sleeve next comes from KGI Securities analyst Ming-Chi Kuo. As far as the iPhone 7 goes, the device is naturally expected to get an A10 chip with even better performance, while the iPhone 7 Plus might also get 3GB of RAM in order to further bolster performance.
But perhaps more interesting is the idea of a new 4-inch iPhone, which Kuo suggests is in the works. Not everyone wants a 4.7-inch to 5.5-inch iPhone, and Apple once staunchly defended the one-handed use of 4-inch devices. At a time when Samsung (NASDAQOTH:SSNLF) was enjoying all sorts of success pushing into phablet territory, Apple stood pat with relatively smaller display sizes for an admirable amount of time.
The new upgraded 4-inch iPhone is said to enter mass production as early as the first half of 2016, although that doesn't necessarily mean Apple would launch it in the first half. It might feature an A9 chip in order to handle iOS 9 properly, and feature a new metal casing. The move makes sense because Apple still wants to address the market for 4-inch smartphones. But then we arrive at another question: What will Apple call it?
Time for iPhone Air?
There's been speculation before that Apple would use the iPhone Air moniker. Apple has used the Air and Pro distinctions across numerous product lines to differentiate between consumer and professional offerings, most recently with the iPad Air and upcoming iPad Pro.
A new 4-inch iPhone would be a prime candidate to take on the iPhone Air name, while the larger and more powerful flagship models could be called the iPhone Pro and Pro Plus. Like the Mac, the models could then be denoted by the year of release. It's a naming mechanism Apple has successfully borrowed from the auto industry and is indefinitely sustainable.
I'm going to call it. It's time for the iPhone Air, Apple.
The best defense is a new $450 iPhone
Tim Cook has talked about price umbrellas before. While there's still ample room for rivals to undercut the iPhone, and Cook has no interest in entering the "junk" portion of the market, Apple still needs to defend its lowest price point. Right now, that's the iPhone 5s that starts at $450, which was released in 2013. By the time 2016 rolls around, the aging iPhone 5s might be a tough sell, even though Apple has demonstrated a unique ability to sell large volumes of aging iPhones before.
Imagine a 2016 lineup with an iPhone Air at $450, iPhone 6s at $550, iPhone Pro at $650, and iPhone Pro Plus at $750. Sounds pretty strong to me.
Evan Niu, CFA, owns shares of Apple. The Motley Fool owns shares of and recommends Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.