Originally Posted by steelbom
What do you mean "you'd get an extra 30% content"? I suppose everything would be bigger, but you'd still have the same amount of content.
You have to understand that once you get past the threshold the eye can see it doesn't make any difference. I have acute vision, and can just resolve the spaces between the pixels on the iPhone 4's display, but I've ton a ton of tests and I can't tell the difference in density from 1' out between my 252 PPI Desire and the 329 PPI iPhone 4. I have to hold the phones 5" from my face before I can tell the difference.
If you can't see the individual pixels the physical resolution doesn't matter. The iPhone 4 could be 960x640 or 96000x64000 and you wouldn't be able to tell the difference with your eye alone. It would physically look the same.
What does matter is the DPI scaling. If you had a 3.5" iPhone 4 and measured a letter in an app and found that it's real world height was 3mm, it would still be 3mm on a 4" iPhone 5 screen. The difference being that the letter would take up less of the 4" screen, so you could fit more letters on it.
Here is the simplest example I can come up with:
The size ratio between the two screen is the same as that between a 4" and 3.5" screen. The text is the same size with the same line height and the same margins. The difference is that the text on the left would be at 288 DPI while the one on the right would be 329 DPI. The two densities are completely indistinguishable from each other when held at greater than 3-4" from your face, the 'H's on the left would look just as sharp as the 'H's on the right, despite being made up of less pixels.
Thanks to the larger area you can fit 33% more 'H's on the 4" screen, despite them being the same resolution. Now replace the 'H's with words in a book, or an article in Safari, or a list of apps or music in the App store or music player, and you'll see where the extra 33% comes from.
Now you're probably thinking that you could just decrease the size of the Hs of the screen on the right to match the DPI of the screen on the left. But what if the size is already as small as you're comfortable with? Making the text physically smaller would make it look blurry, as you'd be extending the text beyond your range of vision.