Apple is pushing for a new smaller SIM card format. Reuters reported that last week. In an interview with AllThingsD France Telecom CEO Stephane Richard says that he understands that the next iPhone would be smaller and thinner. Apple gains more space inside the iPhone by using the smaller SIM Card design.
Apple would prefer to go without SIM Cards, but carriers do not like that. The new tiny SIM is the compromise between Apple and Telcos like France Telecom. How much difference an even smaller SIM card will make compared to what the iPhone 4 and iPad is I think not that dramatic.
The size of the iPhone is mostly driven by the screen size. The thickness is very much depended on the battery design. The new iPhone might be only a tiny bit thinner. The overall size will stay the same. I believe the rumors about an edge-to-edge screen have some merit. What seems more certain is that Apple is moving the camera and the flash apart. A new image appeared today on Taiwanese Apple.pro what is supposed to be a iPhone 4S back pane.