Here's what I wrote two years ago, when the iPhone 5 shipped:
> There is no argument that some people really do like these big
> closer-to-5-than-4-inch Android and Windows phones. I was in a
> Verizon retail store yesterday (long story; don’t ask) and
> overheard a relatively small woman buying a Galaxy S III. A
> companion asked if she wasn’t worried that it was too big, and she
> said no, big was exactly what she wanted, because she doesn’t have
> a tablet and wanted to do a lot of reading on whatever phone she
> got. She even said she was thinking about the 5-inch Galaxy Note
> (which Verizon doesn’t carry). It was like a conversation out of a
> Samsung commercial. Such people surely think the iPhone 5’s
> display remains too small. But, trust me, there are going to be
> many long-time iPhone users complaining that it’s too big after
> they upgrade.
>
> In an ideal world, perhaps Apple would offer two iPhone sizes --
> like they do with products such as MacBook Pros, MacBook Airs, and
> iMacs. A smaller one with the classic 3.5-inch display, and a
> larger (say, 4.5-inch?) one for people who want that.
I was just discussing the screen size rumors with an iPhone 5 user yesterday, and you're spot on with the complaints about it being too big.
On his 3g (or maybe 3gs?) you could hold it one handed and reliably reach the whole screen with your thumb. One the iPhone 5's larger screen that's no longer true.
Apple's certainly aware of this problem, so even if they launch a bigger screened version I can't imagine they'll dropping the form factor of the 5s any time soon. But I'm curious to see how they'll market it.
Limiting iPhones to a single size has always let them control the touchscreen experience, but they'll have a lot of people buying phones with a worse experience because they don't think about the downsides of a larger screen.
Apple's always made it their business to make as many design decisions as possible for their users, and it's worked out well for their OSes and devices. I'm betting some people there aren't happy about giving this one up.
That holds up pretty well, but I undershot the two sizes by an inch apiece.
Also, I haven't said whether I think a 5.5-inch iPhone is actually any good, because, duh, I haven't even seen one yet, let alone used one.