There are some rumours of a larger iPhone being announced this year at 4.7", some even believing 5". I wonder why people think this will happen? Because Apple wants to conform to everyone else?
I have a theory on why it won't happen. I think if people get a larger iPhone then they'll feel less inclined to buy an iPad mini. I made a post earlier on why I don't think bigger phones are better, mainly because if I want more screen real estate then I'll get out my iPad mini Retina. Of course, not everyone can afford an iPhone 5s and an iPad mini Retina, but if you're buying Apple then you're going to be spending quite a bit of money anyway.
The marketing guys at Apple are quite clever; the iPhone 5c is a very clever idea, and it may be inadvertent but the juxtaposition of the iPad Air and iPad Retina (4th gen) is quite clever as well, because some people will look at this with ignorance and believe that the Air doesn't have a Retina display, because it does't mention it.
So, I think Apple will do the right thing here and not bring out a bigger iPhone. The difference between a 4.7"/5" screen compared to a 7" screen is quite big but not big enough, not like going from 4.7"/5" to 9".
That being said, the iPad mini came out because of the smaller Android tablets, and if they're still being sold meanwhile bigger Android phones existing, perhaps there'd be nothing for Apple to worry about with selling a bigger iPhone. I'm not the marketing people.
Edit: It happened! Why? To sell more Apple Watchs; taking a big phone out of your pocket all the time for things is going to be tiresome, one goal of a bigger phone is to make people want a Watch as well. But still, this'll probably impede iPad mini sales.