On recent Build and Analyze and Hypercritical podcasts, Marco Arment and John Siracusa, respectively, talked about the rumors of a bigger iPhone screen.
John predicted that Apple would only make the screen a little taller, but Marco observed that any resolution change would mean significantly more work for developers.
My take is the latter rules out the former: Apple won’t and can’t make a little change. Anything that requires new developer work opens the possibility that many/most developers won’t do it promptly or at all, making Apple look bad. The Cudgel of Rejection only works for new apps; for old apps, there has to be a carrot that motivates developers to rush out new versions with support for the new resolution.
And while I don’t know what it will be (I can’t even hazard a guess), I believe it won’t be a minor hardware upgrade.