Never said Apple doesn't make great products, they definitely do. Although they're not as "freakin' amazing" and groundbreaking as many people believe, and they could benefit from a little innovation lately. But you're right, Apple at the moment is riding on the curtails of Steve Jobs but I'm not sure how much longer that will last.
I think Apple really survives because of how well all their products work together. Someone like myself who needs the latest and greatest tech isn't as willing to move to an Android device as they are the next mediocre iPhone because it all works together. I have a Mac, AppleTV, AirPods, iPad, and iPhone and they all just work together. Switching disrupts the ecosystem and I think many people aren't willing to do that. Also, I think iPhone has definitely become a status symbol. I know at least where I live, if you don't have an iPhone you're kind of looked at as if you can't afford it (even though Android is just as expensive).
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I don't think they would do that. The current rumors are the 4.7 and 5.5 will retain the same form factor as the 7, but the 5.8 OLED will have the reduced bezels which allows for a larger screen in a form factor that is relatively the same size as the current 4.7.
Also, I think this is Apple's way of eliminating their overly fragmented product line. Offer a top end model that most people are going to want in one size, market it as the perfect size because it encompasses the best attributes of both the 4.7 and 5.5, and wait. After a couple years they'll get rid of the plus and offer a 7SE in the 4.7 form factor at a lower price like they did with the 5SE. It'll just be those two phones, one new iPhone and a smaller cost-conscious model - that's it. Steve Jobs would fire everyone if he saw how fragmented the iPhone product line has become.