According to latest rumors, Apple's 4-inch iPhone could already entered production and might be launching in the first half of the next year.
Coming from Japanese blog Mac Otakara and citing reliable sources, the report suggest that Apple has already developed an affordable 4-inch iPhone that is based on iPhone 5S and sixth-gen iPod Touch. The report states that the new iPhone will pack an Apple A8 SoC, 802.11ac WiFi and Bluetooth 4.1 and better FaceTime HD camera. In order to keep the price down, Apple did not include the 3D Touch.
Currently called the iPhone 5S Mark II, the new 4-inch iPhone could launch in the first half of 2016, at least according to current and previous rumors.
Source:
MacRumors.com.