Maybe some people do, but I would honestly prefer going back to iPhone 4/4s/3G/3GS/original screen size. I know many others, who also prefer the smaller more compact screen size. A phone is for the pocket, and I can't fit an iPad in my pocket.
They never told you to fit an iPad in a pocket, just a bigger screen for a better immersive experience. Note 3 seems to be fitting well in peoples' pockets.
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I feel like the 3 major reasons for people not wanting an iPhone or switching away from an iPhone are:
1. Screen size
2. Dislike of iOS (lack of customization)
3. Poor battery life (no user replaceable battery)
But I think the majority of people just want a later screen. Apple is going to sell BOATLOADS of iPhones later this year because of the larger screen alone. And they'll still sell a smaller size (5s/5c) so they can please that crowd too.
I just hope Apple doesn't make the iPhone much thinner than 5s because I would like a larger battery compared to the screen size. I have the exact same views as you because many just want a bigger screen, and some want both screen and a better OS.
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The demand for netbooks was world wide too. But Apple did the right thing and released the iPad instead. I wonder if Apple will release a phablet or a phablet beating product this year.
iPad is different though. iPad is iPad.