Apple's WWDC 2014 brought a new version of iOS 8 but no new hardware. However, developers are talking about resizeable iPhone screens in the simulator. But that could refer to a "split-screen" feature, as seen on some Microsoft Windows 8 and Android devices. This feature would make it easier to copy and paste from one app to another, or just to view multiple apps simultaneously. Still, all signs point to larger screens (4.7-inch and even 5.5-inch) in the works, if only to keep up with the Android "phablet" trend.
While the smart money is on larger iPhone screens, I'd prefer to see a range of iPhones, as small as the current iPod nano to something shy of the iPad mini. As a developer, it would be an interesting challenge to write apps for something as small as an iPod nano, and the more device choices, the better, to increase the potential market for iOS apps. Developers have to have access to each new device, for testing purposes, so I'm sure I'll end up with a larger iPhone 6, but I'd rather have something smaller. A pocketable iPhone that's about the size of a thick credit card would be terrific. I probably wouldn't surf the web or run word processing apps, but it would be great for contacts, phone calls, quick searches, and calculations. Apple's Siri could make text messaging and data entry practical on a small device.
Perhaps that's where an iWatch comes in. It would be a small, always "handy" (pun intended) accessory to a larger iPhone, stashed away in a briefcase or purse. This could be a brilliant marketing move, as it encourages customers to buy a larger phone (at a higher price) and then spend more money on a companion that makes it more accessible! Of course, it would only be compatible with iOS devices, further encouraging (locking in?) the customer to stay within the iOS community.