Regardless of screen size, until Apple redesigns its phone OS, I'll be staying away.
I also find the mockup to be horrid and improbable (probably an iPod instead).
That said, it would be smart for Apple to release its products in more sizes, to mitigate the loss of customers due to device size preference, and thus keeping customers in their ecosystem. Unfortunately for Apple, their own decisions have led some people to taste foreign waters and find them sweeter. As such, they'll have less access to their money, whether it be in hardware sales or iTunes purchases.
I find Android devices in the market to be perfectly viable (and even superior for some) alternatives to the iPhone. We are now spoiled for choice, so Apple needs to start introducing some of those choices into their lineup, as the market is beginning to reach maturity (i.e. devices will not fundamentally change in capability or features). That is, without alienating its user base. The one-size-fits-all mentality needs to die. Now.
When introduced, the iPhone was a significant departure in how difficult and confusing it was to use a phone and its smart functions. The field today is pretty level on that regard, with Apple having an advantage in some areas (touchID) and disadvantage in others (customization, screen sizes).