I also agree there are plenty 4.5" and bigger smartphone on the market.

But, let's not talk in term of screen diagonal, when we say we want a small screen, I'm pretty sure we mean we want a 60 mm maximum wide phone. With such a width, we can expect a 4.3" 720p screen.

If we want to make things a bit more realistic we've to choose a hardware which is the closest possible of something already existing on the market. So, personaly, I don't vote for a HW keyboard.

And we've to find how to get a realistic external design.