An on-going rumor indicates that Apple might be testing a bigger display for its forthcoming iPhone, however, the width should not change and only its length will be increase to offer a 640 x 1136 pixels resolution vs. 640 x 960 pixels today. So we could get a 3.95" display. I would offer a format very close to the 16:9 setting found in TV set, while we are currently having a 3:2 format. Developers would have to adapt their application to adapt to such change.
The rumor related to a smaller dock connector seems to be supported by many sources (but maybe with a single origin). It will create a huge earthquake among third-parties that have developed peripherals around the iPhone and iPod ecosystem. It is very likely that Apple will adopt such smaller connector for all its forthcoming iDevices.
By linathael, original by Lionel