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And yes, there's plenty of space for hardware revisions, particularly with regards to smaller die sizes which would reduce power consumption and heat, both of which are conducive to smaller device designs.

Even with the same 5" screen size, which I've already come to prefer over anything smaller, the bezel could be made thinner without having to squeeze the controls any closer (IMO, already at minimum clearances), and it could be made considerably thinner once the SoC generates less heat and a slimmer battery can be used.