NEW YORK (TheStreet) -- The Apple (AAPL - Get Report) rumor mill is in full force this morning, with details on the iWatch and a potential iTunes update emerging. However, Apple's biggest driver is still the iPhone, which may come in two sizes next year.
KGI Securities analyst Ming-Chi Kuo, perhaps the most accurate of all Apple analysts, notes that the iPhone 6 (some are calling it iPhone Air) will come in two sizes, 4.7-inches and 5.5-inches, but will be released at different times due to manufacturing issues with the larger form iPhone's screen.
"Apple to offer all-new design 4.7" and 5.5" iPhone 6. Although the 5.5" model will have higher resolution (1,9201,080/401PPI) than the 4.7" (1,334750/326PPI), due to same proportion in terms of length and width, it is good for APP compatibility," Kuo penned in the note. "Specifications common to both models will include A8 processor, LPDDR3 1GB, LTPS panel, in-cell touch, Touch ID (fingerprint identification), 10-20% narrower bezel, 6.5-7.0mm thickness, NFC chip with security element and metal casing."
It's interesting that Kuo predicts there will be an NFC (near field communications) chip with the phone, something Apple has shunned in the past. NFC has traditionally been used for touching or tapping phones to another device, be it for mobile payments. Apple introduced TouchID as part of the iPhone 5s, something Apple CEO Timothy D. Cook said was partially due to mobile payments.
"The mobile payments area in general is one that we've been intrigued with, and that was one of the thoughts behind Touch ID," Cook said on Apple's fiscal first-quarter earnings call. "But we're not limiting ourselves just to that. So I don't have anything specific to announce today, but you can tell by looking at the demographics of our customers and the amount of commerce that goes through iOS devices versus the competition that it's a big opportunity on the platform."
Kuo also notes that the larger iPhone will be seen as a "phablet" (phone/tablet combination), and will likely include a larger battery to account for heavier usage. He also notes that the camera in the next iPhone will stay at 8 MP, but get a longer exposure time, improving quality.
--Written by Chris Ciaccia in New York
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