ANALYST: The smaller iPhone is not innovative and won't save Apple's falling sales

KGI Securities analyst Ming-Chi Kuo has cut his estimate of projected sales of the rumoured new 4-inch iPhone, reportedly called the “iPhone 5se,” in half, from 18-20 million down to 10-12 million units.

“We revise down 2016F shipments of new 4-inch iPhone, as little new to offer,” he wrote, according to 9to5Mac. “While the new 4-inch iPhone has been enjoying the media spotlight, we don’t regard the product as innovative, either in terms of form factor … or hardware specs.”

Kuo has also revised his Q1 2016 iPhone sales projection downward. According to his estimates, Apple will ship 43 million units, a decline of 44% quarter-over-quarter and 29% year-over-year.

The smaller iPhone will likely include an all-metal design. Apple previously made the 5c, which had a plastic body, but discontinued it after it did not sell as well as hoped.

The inclusion of a metal body and, according to reports, a design similar to the iPhone 5s, is important as it signals the iPhone is high-quality. Ben Thompson, an independent analyst for Stratechery, argued that the 5c failed because it was plastic and, as such, lower quality than other iPhones.

Other analysts are also predicting falling iPhone sales year-over-year as the high-end smartphone market becomes saturated and the iPhone 6s fails to excite customers. Predictions for December quarter sales sit at between 72 million and 75 million units, a decrease over the same period last year.

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