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marco:

[…]

To make reading a selling point, they tackled the wrong problem: anyone who doesn’t enjoy reading on their phone is likely to cite the physical size, not the pixel density, as the limiting factor.

[…]

Of course, if everyone listened to what people cite as the problem with their current devices, we never would have gotten the iPhone or Instapaper ;-)

My impression is that if Apple really is doubling the pixels per inch on the iPhone they probably have thought through the reasons pretty thoroughly.