It strikes me that Apple should really be releasing a 6.5" iPad Mini successor (iPad Nano) but with cellular tech so it can make phone calls. This would be a killer device and would make billions for Apple. Whereas a 6.5" iPhone is just the scatter gun approach suggesting Cook and co have no clue. It'll flop.
What would be the difference?
The iPad is just a big iPhone/iPod touch. The only thing that makes an "iPhone" is the phone app, which they could add to cellular iPads if they wanted to.