On the heels of the iPhone 7 rumor, there are speculations floating online saying Apple will be releasing a 4-inch iPhone variant next year.

According to industry follower and keen Apple insider Mac Rumors, there is a new research report made by KGI Securities analyst Ming-Chi Kuo. According to Kuo, the Cupertino-based company will be releasing a smaller iPhone variant, with a 4-inch display, and specs that match closely those of the upgraded iPhone 5s. Aside from the upgraded specs, the new variant is expected to match a recent flagship release in terms of speed and performance, as it was also mentioned that the 4-inch iPhone will carry the new A9X chipset.

The new iPhone is also expected to release early next year, the middle of 2016 at the latest.

As to why Apple is keen to come out with a smaller iPhone, Kuo believes that the Cupertino-based company wants a cut of the niche market. According to Kuo, "As there is still demand for a 4-inch iPhone, we believe Apple will upgrade this product line. Because the iPhone 5s is more popular than the iPhone 5c, we think Apple is likely to launch an upgraded iPhone 5s."

Kuo added that the new iPhone may also use the current iOS 9 platform or even a next-gen iOS platform as its mobile OS. Kuo was quoted as saying, "We predict Apple will mass-produce this new 4-inch iPhone in 1H16 with metal casings. In order to make the current iOS 9 or next-generation iOS 10 run smoothly, Apple may adopt an A9 chip for this new phone."

As the report remains pure predictions based on models, it remains to be seen if Kuo will be proven right. However, many observers are taking note of the research report, seeing as Kuo is one of the very few securities analysts who have correctly predicted Apple decisions and product outings in the past.