It is in my belief that Apple will merge the two model lines of the iPhone into one for the iPhone 7. It will be somewhere between 5 and 5.2" and will feature a higher resolution OLED screen. The camera will also have OIS by default. By going back to one line, you cut production costs significantly and apps will only have to adjust to one new resolution instead of two.
I have owned both the 6+ and now the 6s+ and the reason I chose them is because the 1080p screen is just better than the other one and of course the OIS. An even higher res screen on the 7 would be fine even it was smaller. OLED is coming and it's going to be great.