For months now, Apple rumour mills have predicted a compact 4in model of the 2013 iPhone 5s, expecting its launch in 2016. Latest reports suggest that the version will be called iPhone 5e, with the alphabet in its name standing for "enhanced".

It could be priced at about $500 (£345), is being seen as an entry-level handset, on the lines of the iPhone 5c. China technology site MyDrivers, which reported the latest rumour, quoted Foxconn sources as saying that the models are currently in production and estimated to be released in February-March.

This is the same time period when Apple is expected to hold a press conference for a product launch. Analysts have so far assumed the launch would be of the iPhone 6c or Apple Watch 2, or both.

Here is all we know so far about the expected model:

E and not C: Version of iPhones generally suffixed "C" like the 5c and 6c are for the different colours they are available with little change in features from the main models. This time the "E" is to suggest "enhanced" with the phone having a regular metallic body. It would be available in two or three colours.

A8 Processor: The 5e is expected to run on an A8 processor, instead of an A7 that powers the iPhone 5s. The processor, which first appeared in iPhone 6, was introduced in 2014. Apple has earlier stated that the A8 has 25% more computing power and 50% better graphics performance while drawing only 50% of the power, compared to the A7.

Other Apple devices that use the A8 are iPhone 6, 6 Plus, iPad mini 4, Apple TV 4, iPad Air 2 and the newest iPod touch. The company's new A9 processor runs on the iPhone 6s and iPhone 6s Plus. It is 70% faster than the A8 chip and is most likely ruled out for the 5e due to higher cost. The current report counters earlier claims that the new 4in iPhone would feature the latest-generation A9 chip.

Dimensions: Japan's Apple-dedicated blog Mac Otakara has said the iPhone 5s (2nd generation), in this case the iPhone 5e, will measure 122.90mm ​​x 57.63mm. It will be slightly thinner than the iPhone 5s.

Storage: It will have a standard 16GB model and a larger 64GB model but give a miss to the 128GB option currently available for the iPhone 6 and iPhone 6s lines. Like all previous models the 64GB version will be priced higher.

Camera: There are hardly any reports detailing the expected iPhone 5e camera. Given the lower cost it is expected that Apple will stick to the iPhone 5s-like rear-facing 8MP camera.

Apple Pay: KGI Securities analyst Ming-Chi Kuo, who has been a reliable source for Apple rumours, has previously claimed the new 4in iPhone will feature Apple Pay. Currently Apple Pay is not available on the iPhone 5s unless paired with an Apple Watch.

Apple has been known to stop production of its older iPhone models as it launches new ones. This time its is expected that the roll-out of the iPhone 5e would lead to the end of the iPhone 5, 5s and 5c lines.