Rumor: Apple has an updated 4-inch iPhone due early next year

It could combine the power (and metal) of new iPhones with the smaller size of older ones.

Want a handset with Apple's fancy new A9 processor, a colorful metal case and a slightly smaller display? GHI Securities' Ming-Chi Kuo says you're going to get one. According to the analyst's latest research, Apple is on track to launch a 4-inch Apple 5 successor in early 2016 -- painting the picture of a device with the same A9 processor as the iPhone 6s, NFC support for Apple Pay, a metal case with multiple color options and a $400-500 off-contract price tag aimed at the budget market.

If real, the device could be a welcome followup to Apple's "unapologetically plastic" 5c smartphone -- retaining the smaller footprint of the iPhone 5/6 and still integrating some of the best tweaks introduced with the 6s. Still, take the rumor with a grain of salt: Ming-Chi Kuo has a decent track record when it comes to Apple predictions, but he isn't always right.

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