I don't think you can combine the two, but doesn't phone app serve all functions of people app and visa versa?
For example, on the phone app you see on the very top the search window where you can type in the name of the contact and the phone will bring it up. If you tap on the pic icon, you will get detail info; if you just press anywhere in the contact, it calls the person.
Right below the search window is your most recent call. Below that is your favorites, which you can choose or delete by hitting the "star" icon on the lower right hand corner of the picture (and which list you can expand/delete by un/selecting contacts and turning on/off the "star" icon.
Below your favorite is the alpha list of all your contacts.
Do we need an app that combines both "phone" and "contacts"?