Well both are bound to happen. The current Xbox One will continue to be manufactured, even if an upgraded model comes out. so the Xbox One will likely undergo a redesign/ slimming. However, boxes with high end hardware need to breathe, so the next Xbox is likely to still be big(ish)...that is, possibly smaller than the one now, but likely not larger.
Also, there was a quote floating around out there, stating that the anniversary update is a huge update that will "change the way Xbox One will operate." This could be construed to mean many things, but a lot of hardware enthusiasts out there know that the Xbox One has "sleeping hardware" in it. We know the Xbox One actually has 896 stream processors, but only uses 768. Unlocking those additional streams can mean the difference between 1080p gaming, or sub-1080p gaming. The Ps4 has 1152 stream processors, with an additional 128 disabled, unfortunately, this doesn't equate to 4K gaming, but can mean more efficient 1080p, with extra bells and whistles. There are also other "interesting" features that Microsoft didn't bother to explain at Hot Chips, regarding these additional Command Processors(2 for compute, 2 for graphics), which are also referred to as "Command Streams." It is thought that these could be offload resources for graphics and CPU calculation, as well as a solution to HSA. Currently, I don't believe any of this stuff is being used in the Xbox. We are still undergoing an ugly guinea pig phase where they are trying to see what they can get out of these two consoles, with minimal resources and slowly releasing more over time. Many developers do not like this about consoles. They prefer to have the hardware access up front, as they would a PC.
Once the coding and techniques are efficient and making good use of the hardware, it will likely be then that the rest of these resources are released. This is why we see weird things like, "Sony increases dedicated gaming memory to 5GB," or, "Microsoft has dedicated an additional CPU core for gaming, etc."