After years of shipping only one size of iPhone, why would Apple suddenly add a second, larger "iPhone Plus" like the one that's been rumored? Andy Ihnatko's recent post about giving up his iPhone in favor of a Samsung Galaxy S III points the way:
The Galaxy S III's screen has roughly the same pixel density as the iPhone 5 (they're both greater than 300 ppi). When I'm reading a book, I can see more of the page, and the wider content margins are more comfortable. I get to see more of a map without having to zoom or scroll. I can see more of the email message, and more of the article in my newsreader. A movie or video is large enough that I feel as though I'm seeing all of the rich HD detail I was meant to see. When I'm reading comics, I don't need to keep twisting the screen to read panels that have different orientations.
The screen of the iPhone 5 sometimes makes me feel like I'm reading a grocery receipt, not a book. And I never used to read from my phone in bed. Now, if my (still quite beloved) iPad is downstairs and the Galaxy S III is on the nightstand, I'll spend an hour reading from the Samsung rather than risk cold feet.
Ihnatko's point isn't that there's anything wrong with the iPhone. Rather, he'd simply prefer a larger size, and Apple doesn't provide one. The taller iPhone 5 gets part of the way there, but it seems that there are a significant number of people who'd prefer an even bigger device. It's remarkably similar to people who liked the iPad but found the Kindle Fire to be a more appealing form factor. With the iPad Mini, Apple addressed that segment of the market quite successfully. Now would be an opportune time to do the same with the iPhone.