The iPhone SE potential

Update: See iPhone SE

That Apple is continuing to make iPhones isn't particuarly interesting. (If they were to shut the place down and go into the hot tub business, now, that'd be something else.) How Apple continues to solve problems and bring greater value to the phone space is what's interesting to me. With iPhone 6s and iPhone 6s Plus, the answers seem apparent, if not obvious — better cameras, better processors, and the continued expansion of Force Touch and Taptics across the product line. But what about an iPhone 6c?

Small problems

One of the "problems" customers face with the current iPhone lineup is size. People who really, truly prefer smaller phones have to choose between getting a 2013-era iPhone 5s with a 4-inch display, sacrificing a little on camera and specs, or a 2014-era iPhone 6 with a 4.7-inch display, sacrificing on one-handed ease of use.

High-end Android, for the most part, abandoned the 4-inch market segment years ago. These days, the "small" section of many Android lineups starts around five inches; no one seems to even ask about smaller Android phones anymore.

In contrast, up until six months ago, the iPhone's flagship model was four inches. That phone remains available today, though with inferior specs when compared to its bigger siblings. Which prompts people to ask about new 4-inch iPhones all the time.

• Do people really want smaller screens... or smaller iPhones?

Big problems

Then, there's distinction: Come next year, how does the company drop the existing iPhone 6 and iPhone 6 Plus by $100 without also dropping average margins or demand for the new iPhone 6s and iPhone 6s Plus? What's more, how would they introduce a 4-inch variant without doing the same?

Traditionally iPhone price tiers are based on storage. It's an abstract and has no direct correlation to cost, but it's something people easily understand. Bigger costs more. 128 GB is bigger, so it costs $100 more than 64 GB. Everyone gets it.

With iPhone 6 Plus, Apple expanded the definition of "bigger" to include screen sizes as well. 5.5-inch screens are bigger, so they cost $100 more than 4.7-inch screens. Everyone still gets it.

"Smaller" works the same way, just in reverse. 16GB is smaller, so it costs $100 less than 64 GB. 4.7-inch displays are smaller, so they cost $100 less than 5.5-inch displays. (So does "older" — Apple often drops the price of the previous generation iPhone by $100 and keeps it in the lineup as well.) Still getting it.

But this means that if Apple goes smaller again, introducing a 4-inch iPhone 6c, the expectation would be for it to cost $100 less. That may be one of the reasons we didn't get a 4-inch iPhone 6 in 2014 — all that bleeding-edge technology crammed into an even smaller casing would be expected to be delivered at an even lower price.

The iPhone 5c solution

Apple faced a similar "problems" in 2013 when they introduced the iPhone 5s. Instead of dropping the nearly identical looking iPhone 5 by $100 and slotting it into the mid-tier, they replaced it with the iPhone 5c. The iPhone 5c was both easier to manufacture and visibly distinct from the iPhone 5 and iPhone 5s. It used brightly colored plastic for the casing and added an element of pop-art appeal to the lineup.

The iPhone 5c wasn't the blockbuster the iPhone 5s was, but it wasn't meant to be. iPhone sales are traditionally like major motion pictures: They spike on release day, then trend down until the next release. iPhone 5c was meant to be more like a TV show. The numbers may not be blockbuster-style, but they're solid, week in, week out. More importantly, the iPhone 5c preserved margins and demand for the iPhone 5s.

iPhone 6c potential

To me, there are two avenues Apple can take when it comes to a potential iPhone 6c.

If the company wants to make 4.7- and 5.5-inch iPhones less expensive and get them into more hands — all while maintaining the same kind of high-end exclusivity on metal finishes that the company did for iPhone 5s — then unabashedly plastic iPhone 6c and iPhone 6c Plus options could be on the horizon. The candy-coated casings would make such phones feel even bigger, of course, but that would be a different "problem".

More likely, Apple wants to keep 4.7- and 5.5-inch iPhone models exclusive to the high-end, a 4-inch iPhone 6c could make a lot of sense.

It would let the company remove the current iPhone 6 and iPhone 6 Plus from the product lineup, just like the company removed iPhone 5 in 2013. It could sell the smaller model for $100 less and preserve both average margins and demand for the latest, greatest iPhone 6s and iPhone 6 Plus. It would also look different and have more modern specs, including a better camera than the iPhone 5s, which will presumably drop by an additional $100 this fall to take up position at the bottom of the lineup. (And punt the iPhone 5c out of most markets.)

Most importantly, it would let the existing 4-inch iPhone customer base move forward. It would keep them one year behind the flagships in terms of technology, and on a separate path in terms of design, but it would keep the range — and hence the value of the iPhone — for those customers.

John Gruber and I spoke about a potential iPhone 6c on his podcast, The Talk Show, many moons ago. It's an interesting idea and one Apple has almost-certainly explored because, again, they explore every interesting idea. Whether they ultimately go forward with an iPhone 6c or not will depend on whether they consider what I termed "problems" above to actually be problems, and if they do, whether or not the company feels an iPhone 6c would be the best solution.

Either way, unless and until Apple gives it all up for hot tubs, there are new iPhones coming our way this fall. And it will be fascinating to see how Apple arranges the rest of the product lineup around them.