Yes, but you are alienating the other half (those who are willing to pay for more) if you keep the phone at 3.5" for another year while everyone else is moving to larger and better resolution high end models. Apple used to manufacture the phone that was the most expensive and best in all regards. Now the customers who have no limit in money to spend (corporate users) are looking for better alternatives. Apple cannot stay out of the market that has the biggest profits. If they want to keep losing their market share, they have to have more than one sized phone model at the market. There's huge demand for both a smaller and a larger iPhone currently. The customers will choose another brand if the iPhone is too small or large for their needs. I personally love the software quality of iPhone, but that's not enough for me to keep buying products that do not suit my needs otherwise.
I'd still like to see data showing that these super phones with big screens sell in large volumes.
Sure Android has a large market share but a lot of volume goes to phones that are as low as 99 Euro unlocked and without contract. These phones with large screens are 500 Euro or more, meaning they cost as much as or more than the iPhone. Are they moving in comparable volume? iPhone is the best-selling model in a lot of markets. Maybe combined they exceed iPhone sales?
Or is it that these flagship models get a lot of attention but relatively low volume of sales while the bulk of the sales go to boring, low-budget ZTE and Huawei models?