Come on, its eventually going to happen. It's all about timing. Not everyone wants to read a 9.7" tablet in bed at night. It'd be great to have a smaller option. The same with a larger screen iPhone. I wouldn't be surprised if the new one was 4" or bigger.
Honestly, it'll be great if we saw a 4.3" iPhone, 7.85" iPad and a 10.1" iPad by next year. But only Apple knows. I'm enjoying this retina for sure.