how do you know what the market demands? you know through sales. The market liked a big iPhone 3, so it is reasonable to predict that they will like a big iPhone 4.
Feature list:
- front facing camera
- "retinal" display
- iPhone 4 style designing
In the past couple years Apple has shown a much better ability at predicting what the market demands than random internet commentators. I don't think their thought process for the iPad was "big iPhone 3," as they changed many applications. The iPad 2 may share many features with the iPhone 4 because Apple now has the knowledge to execute those features and the technology is now mature, but the reasoning wouldn't be to "make a bigger version of the iPhone 4."
