Since there needs to be an area without the display panel to house the camera(s), speaker, I would not be surprised if they wrapped the display around to the corners (like this mockup shows). It gives it better symmetry, vs. just cutting off the display horizontally which introduces a top area that's not proportionate to the lower section (like the current designs). I think Apple would _love_ (like most companies and consumers) a complete display surface, but the tech isn't there yet.
As far as the space being used, it seems like that's almost "free", like we'll get a standard rectangle in terms of developer accessible space, and those little corner sections will be reserved (in the API) for Apple, for special iOS notifications. Clearly, there needs to be more room - as someone pointed out - there's Location Services BT, DND icons, but maybe those all drop down into the "perfect rectangle" area on wake, or unlock[?] Maybe there will be a way to configure a widget-like icon, in that area.
Again, it's sort of, we can cut off the display, make it a horizontal line under the camera/speaker, or wrap it up around that area and do _something_ with it.
Interesting ...