The highest is the LG LU1400 with 333 pixels per inch, but it's I think it's only sold in Korea or Japan or some other Asian Market.
Also note that the LU1400 came out in late 2008, a year and a half ago.
Then there was the Toshiba G900 in 2007 with 313 PPI, making it a "300dpi print quality" phone three years before the iPhone 4.
But anyways, there have been at least 3 other mass market phones that had a "retina display" by Apple's 300+ definition, but 326 is the second highest pixel density on a phone screen that I'm aware of.
For "retina displays" (going by Apple's new marketing angle-subtended eye resolution criterion), simply hold a lot of phones a few inches further away from your face and they will qualify as well.
The highest PPI display I can find was a half inch wide LCD made back in 2008 with over 2,200 PPI, meant for head gear.
In any case, the iPhone 4 has a very nice display. That's true even if it's not the highest resolution ever made, or used in a phone.
Its design will be remembered in a computing historical sense not because of its high resolution, but because it was designed specifically as a multiple of the older display size, in order to allow older apps to be used without rewriting them to support resolution independence. In other words, in this case hardware was used to shortcircuit any need for immediate software upgrades.
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