Hmm, I wonder what they'd do with the resolution on this device to avoid fragmentation. Reuse the current iPhone 5 resolution? I wonder at what point you'll start seeing the pixels. I do think the iPhone 5 Retina display has some leeway although 4.8" might be about as far as Apple could push it.
How so? Apple has a 9.7 inch Retina display on the iPad and a 15 inch Retina display on a Macbook. Family pics look stunning on them.