Apple internal slides
There has been no shortage of rumors that the iPhone 6 will have a big screen ranging from 4.7-inches to over 5 inches. But why is Apple doing this? They just changed the display size from 3.5-inches to 4-inches and another screen size increase could present a headache for developers, casemakers and the whole ecosystem.
The answer, from Apple’s own research/presentation, shows they have to. There is no growth in the 4-inch phone market for devices that cost more than $300. In fact, that market is shrinking overall.
So what can Apple do?
Apple can sell a 4-inch iPhone for under $300, either forgoing their historically huge margins and/or making a cheap device. Neither of which are very likely. You can currently buy an iPhone 5c at Virgin without a plan for just over $300 but those are likely still subsidized because they are locked to Virgin. It is hard to find a 4-inch iPhone for under $500 on the open market.
The much more likely scenario is that Apple sells a bigger iPhone 6 for its current market price and margins addressing the growing market. At the same time, its current lineup could drop in price and come close to hitting that magic sub-$300 price point.
In short, Apple must make a bigger iPhone.