Re: The important bit
I have a Z3 Compact (4.6"), and it is significantly wider than the 4" iPhone 5.
I have average-sized hands for a British male, and my thumb can easily reach 80% or so of the Sony's screen, and 100% with a slight stretch. If the dials on my use-case were twiddled so that I spent more time speaking on the phone, I might have chosen a 4" phone (if a 4" Android with fast internals existed) because it is just that little bit more secure in the hand (the hand is closer to it's relaxed, slightly curled position).
A 4" phone is like playing cards, designed to be easy to hold in a hand. A 5"+ phone is like a postcard, better for displaying a picture. All design and engineering is compromise.
>It looks like Apple may be starting to reduce prices in the face of the Chinese starting to think about Europe and the US.
Also Apple's plans regarding China and India. Don't overlook how much cheaper the new iPhone 5 SE is compared to all of Apple's previous new up-to-date (internally) iPhones.