This Could Be Apple, Inc.'s Next iPhone Lineup

By Markets Fool.com

While Apple is probably still 5 months away from revealing its next iPhone lineup, there has already been plenty of speculation about its plans. It's virtually certain that the tech titan will roll out updated versions of its popular iPhone 6 and iPhone 6 Plus -- but beyond that, numerous theories abound.

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Apple is likely to update its wildly popular iPhone 6 this fall. Photo: Apple

However, a look back at some of the recent changes in Apple's iPhone lineup may provide some hints about what changes could be coming this fall.

What we (probably) know
Apple fans have eagerly embraced larger-screened phones since the iPhone 6 and iPhone 6 Plus debuted. As a result, Apple-followers almost all expect the company to roll out new versions of each phone, which likely will be dubbed the iPhone 6s and iPhone 6s Plus.

In addition to upgrading the processor -- which it does every year -- Apple will probably boost the RAM in both new models from 1 GB to 2 GB. That will allow for snappier performance.

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Furthermore, as my Foolish colleague Jamal Carnette has discussed, Apple may be ready to bring its Force Touch technology to the iPhone. This feature allows the device to distinguish between a "tap" and a "press." Force Touch would enable new ways of interacting with your iPhone, and it could be particularly useful for game developers.

There could be some other tweaks to the iPhone 6s and iPhone 6s Plus, but major deviations from this blueprint would be rather surprising. But Apple's plans for the lower half of its iPhone lineup are less clear. To get a sense of what might come next, let's first take a look back at what Apple has done in the past.

Apple: tweaking its pattern
In 2011, upon announcing the iPhone 4S, Apple cut the price of the two-generations-old iPhone 3GS to zero with a 2-year wireless contract. That marked the first time Apple had offered a "free" iPhone. Meanwhile, the price of the last-generation iPhone 4 dropped from $199 to $99 on-contract.

In 2012, Apple repeated this theme. The iPhone 3GS was discontinued at the same time the iPhone 5 was launched, while the iPhone 4 and iPhone 4S prices were each reduced by $100.

Right now, the iPhone 5c occupies the bottom rung in Apple's iPhone lineup. Photo: Apple

However, in 2013, Apple deviated from this pattern slightly. On the one hand, it discontinued the iPhone 4 in most regions and made the iPhone 4S free on contract, in keeping with previous practice. On the other hand, it also discontinued the iPhone 5. Instead, it launched 2 new models: the iPhone 5s took over the top-of-the-line spot, while the colorful iPhone 5c took the mid-range spot in Apple's lineup (which would have gone to the iPhone 5 otherwise).

Last year, Apple returned to its previous practice of keeping both of the most recent iPhone models around. The iPhone 5s and iPhone 5c both got $100 price cuts. But Apple still introduced 2 new models. This time the iPhone 6 replaced the iPhone 5s at the $199 price point (on-contract) and the iPhone 6 Plus was introduced at an even higher $299 starting price.

What happens next?
In the past few months, several rumors have circulated regarding the possible existence of a new "iPhone 6c." This would be a 4" iPhone with a plastic casing available in multiple colors. In other words, it would be visually similar to the iPhone 5c, but with updated internal specs more in line with the iPhone 6.

Apple may plan to discontinue the iPhone 6 and iPhone 6 Plus this fall. Photo: Apple

If the rumors about the iPhone 6c are accurate, it's possible that Apple plans to repeat its 2013 tactic of switching out the previous year's $199 model for a cheaper-to-produce alternative. In other words, Apple may discontinue the iPhone 6 (and the iPhone 6 Plus) this fall, with the iPhone 6c taking the $99 on-contract price point that would otherwise have gone to the iPhone 6.

This move would make sense in multiple ways. First, it would bring upgraded hardware and an NFC chip (to enable Apple Pay) to the 4" form factor that is still used by about half of all iPhone users. Second, iPhone users have shown they are willing to pay up for larger screen sizes. Keeping a 4" phone in the $99 price slot would make iPhone buyers continue to pay higher prices for the larger 4.7" and 5.5" screens, thus padding Apple's profit margin.

As for the "free" option, the normal -- and most likely -- progression would be for the iPhone 5s to slide down to the entry-level position. However, Apple might instead decide to keep the iPhone 5c instead of the iPhone 5s. That would further reduce its costs, while removing the confusing aspect of having a phone with a premium aluminum casing priced lower than the (expected) plastic iPhone 6c.

The most likely situation
Apple probably won't take the wraps off its next iPhone lineup until September. However, it is already pretty clear that it will update the iPhone 6 and iPhone 6 Plus. The new versions will most likely be called the iPhone 6s and iPhone 6s Plus, with starting prices (on-contract) of $199 and $299, respectively.

At the lower end of its lineup, rather than dropping the price of the base iPhone 6 to $99, Apple may introduce a new model called the iPhone 6c. This would have most of the internal specs of an iPhone 6 inside the body of an iPhone 5c. To round things out, Apple will probably make the iPhone 5s free with a 2-year cellular contract -- but there's an outside chance that the iPhone 5c will remain in that bargain slot.

The article This Could Be Apple, Inc.'s Next iPhone Lineup originally appeared on Fool.com.

Adam Levine-Weinberg is long January 2016 $80 calls on Apple, short January 2016 $120 calls on Apple, and short January 2016 $140 calls on Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.