The rumors from Apple analyst Ming-Chi Kuo of KGI is Apple to launch new 4-inch iPhone early in 2016.He told that the model will not replace current iPhone 6s but it will replace old iPhone 5s. 
Why Apple is making 4-inch iPhone?
Apple has already launched 4.7 inch iPhone 6s and 5.5 inch iPhone 6s plus,then why Apple is making 4-inch iPhone model?Reasons are here:1)In market still demand for 4 inch.In 2015 17 mn 4 inch iPhones will be shipped in 2015.2)Price of 4 inch iPhone will be US$400-500 it will be good range for boost low budget market.3)NFC will support to Apple pay.these are the main reasons Apple still want 4-inch iPhone.
Key features of upcoming 4-inch Apple iPhone:
According to Ming-chi Kuo here are some exceptions of new upcoming 4 inch Apple iPhone:
1)Upcoming 4 inch iPhone will have an A9 chip manufactured by both Samsung and TSMC.
2)At least 2-3 color options with metal casing.
3)NFC for Apple Pay.
4) 2.5D cover glass with curved edges.
5)8 MP rear-facing camera and 1.2 MP facetime camera.
6) Price US $400 or $500.
Kuo also mentioned that Apple will lunch this 4-inch iPhone early in 2016 and whole year shipment will reach up to 20 million units.He also mentioned that apple will launch iPhone 7 in the second quarter of 2016.
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