Sure. They just have the fastest phone with the only functional fingerprint sensor in the mobile space (or virtually anywhere in the consumer space), but they "can't innovate" and need to make the 5s look good. There's more to "innovation" than making a bigger screen or throwing in a bunch of gimmicks like eye tracking. The fingerprint ID is both more secure and more convenient than a simple password. I can add the security of a complex password (for backup) while losing none of the convenience.
More likely they couldn't price the 5 at $99 on contract ($549) and go through the added costs of making the baseband changes to sell it around the world while maintaining their markup, so they used it as an opportunity to develop a plastic model that's cheaper to produce.
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That's probably why they haven't released a bigger phone yet. They don't want to create a new resolution yet and they don't want to lower the pixel density. Android is more resolution-independent, which has its benefits, but also its drawbacks in that it makes it less worthwhile for developers to release tablet versions of software ("the phone version works just fine"). That may be why Android has coalesced around large-screen phones and small-screen tablets.