Bigger screen iPhones are definitely coming
I was digging through the iOS8 API updates, and it looks like iOS8 has some hints towards bigger-screened iPhones, if you know where to look:
iOS 8 makes dealing with screen size and orientation much more versatile. It is easier than ever to create a single interface for your app that works well on both iPad and iPhone, adjusting to orientation changes and different screen sizes as needed. Design apps with a common interface and then customize them for different size classes. Adapt your user interface to the strengths of each form factor. You no longer need to create a specific iPad storyboard; instead target the appropriate size classes and tune your interface for the best experience.
There are two types of size classes in iOS 8: regular and compact. A regular size class denotes either a large amount of screen space, such as on an iPad, or a commonly adopted paradigm that provides the illusion of a large amount of screen space, such as scrolling on an iPhone. Every device is defined by a size class, both vertically and horizontally. iPad size classes shows the native size classes for the iPad. With the amount of screen space available, the iPad has a regular size class in the vertical and horizontal directions in both portrait and landscape orientations.
Based on this, I definitely wouldn't be surprised if we see both a 4.7-inch and 5.5-inch iPhone later this year, as Apple has made it much, much easier for your app to run regardless of specific screen size.
Update: Screenshot from new Xcode Beta: