DPS 2015 does not support alternate layouts in the same way that DPS Classic did.
Instead, it will take one layout and scale it up and down to fit all devices. In your case it is selecting the iPad layout (which has a 4:3 aspect ratio) and scaling it to iPhone (which I assume is an iPhone 5 or newer with a 16:9 aspect ratio). The result is letterboxing on the iPhone with gray bars above and below the layout.
This is all of course assuming that you set up your project with one Top Level Collection. This setup will display the same content in all devices (tablets and smartphones).
You can create another project and select two Top Level Collections (tablet and phone). This is so you can have content that will display on tablets and content that will display on phones. You'll have to create separate .article files for each size and upload them separately.
Going forward you can use responsive HTML and this will allow you to have one article that will display correctly on both tablets and smartphones.
If you already have the 960x640 (or better yet, 1135x640) articles, you might as well use them, depending on your design and how much extra production work you're willing to do. There is less letterboxing, and the text is likely large enough to view. In my experience, text-intensive iPad articles work on the iPhone 5/6 only if the body text is at least 22 points.