New 4" iPhone predicted to drive $5.5B in new sales for Apple in 2016

Apple's refreshed 4-inch iPhone is predicted by one analyst to add 10 million units to Apple's total handset sales this year, resulting in an additional $5.5 billion for the company in fiscal 2016.

Amit Daryanani of RBC Capital Markets issued a note to investors this week, a copy of which was provided to AppleInsider, in which he laid out his forecast for Apple's so-called "iPhone 5se" expected to debut in March. He believes the 4-inch iPhone will sell more than 10 million units, but with some cannibalization of larger models, the net effect will be 10 million additional sales.

His forecast calls for the average selling price of the 4-inch iPhone to be $550, adding 23 cents to Apple's earnings per share, or about 2 percent to its fiscal year 2016 totals.

As to who the "iPhone 5se" is for, Daryanani believes it could drive upgrades for users on three-plus-year old iPhone models, specifically those still running the iPhone 5c or iPhone 5s. He sees the new 4-inch model being a boon particularly in markets like India, a country that was specifically cited by Apple during its most recent quarterly earnings call.

In fact, just this week, Apple discontinued both the iPhone 4s and iPhone 5c from its lineup in India, potentially setting the stage for a new 4-inch iPhone to shake things up.

Production of the next-generation 4-inch iPhone is supposedly underway ahead of an anticipated March 15 media event, at which Apple is also rumored to unveil a third-generation iPad Air. Both products are rumored to launch just three days later, on Friday, March 18.

Apple's new 4-inch iPhone is expected to include a metal-backed, curved-edge design similar to the current iPhone 6s with refreshed internals like an A8 or A9 processor and NFC support for Apple Pay. Rumored names include "iPhone 6c" and "iPhone 5se."

In all, Daryanani said he believes the refreshed 4-inch iPhone will have a "modest positive impact" on Apple's bottom line. RBC has maintained its "outperform" rating for shares of AAPL with a price target of $130.