I don't care if Tim says they think 4 inches is the right size for a phone, but he straight up lied about the trade offs. I wish they wouldn't do this. How can they keep saying this stuff when the evidence completely flies in the face of such a statement? It's bizarre.
He is not (completely) lying.
We always strive to create the very best display. Some customers value large screen size. Others value other factors such as resolution, color quality, white balance, reflectivity, power consumption, compatibility of apps, and portability.
Here he is lying. I really think that a 5" iPhone would have a screen as good as the iPhone 5. (Also, see HTC One)
We always strive to create the very best display. Some customers value large screen size. Others value other factors such as resolution, color quality, white balance, reflectivity, power consumption, compatibility of apps, and portability.
Here he isn't lying. A bigger display would make the entire phone bigger (I think that the bigger screen who would fit on a iPhone 5 body would be 4.3" - see RAZR M/i).
I haven't said about resolution or app compatibility because where it's technically possible to have a better resolution screen while maintaining app compatibility, it would complicate iOS development.
Apple shrank the iPad retaining iPad 2 resolution, and narrowed iPhone only changing the height.
An 5" iPhone could have 3 resolutions: 1) Keep 1136x640 2) Double resolution to retain "Retina Display" quality: 2272x1280 3) 1080p.
1 would be horrible at 5", specially with competitors using 1080p at that size, but would be the best option to keep app compatibility.
2 would be awesome and maybe that's what Apple is waiting to do a bigger phone. But current SoCs struggle a bit to do 1080p and "double retina" has 40% more pixels... But who knows?
3 is obviously possible, but the ratio is a bit off even comparing with the already wide iPhone 5. Maybe it was all just a plan: Change the ratio on iPhone 5 so it wouldn't be much harder with the bigger model.
Definitively, choosing an resolution is not a easy task. I bet on 2272x1280 and think it's possible that by September Apple could have a A7 with a better GPU (PowerVR Series6/Rogue) to drive that resolution well.
A6X can work with a even bigger resolution, but I don't think it would work well on a phone, even on a 5" one.
What I just hope is that Apple don't forget that there is market for small high-end phones. There aren't any options on Android anymore...