It is rumored that Apple will launch a revamped 4" inch iPhone similar to the older variants but powered by A9 processor seen in the iPhone 6s series. It will also have NFC for Apple Pay says Ming-Chi Kuo, Analyst at KGI securities. Kuo has a successful track record of predicting Apple's products.
According to Kuo, the phone will resemble an iPhone 5S, will have a metal casing and would have a identical specifications to the entry level iPhone. The New Apple iPhone is targeted at consumers who would prefer a budget friendly phone and would still prefer Apple. The device is expected to cost in the range of $400-$500 (in the range of Rs. 25,000 to Rs 35,000).
Kuo predicts that the device would look similar to iPhone 5S, it will cover 2.5D cover glass. It will also be available in Silver and Space grey. A gold color is unlikely being an entry level phone. According to Kuo, such a phone will help Apple spiral up its sales as the new iPhone 6S did not do well.