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For me at least the screen size isn’t the limiting factor the lack of a keyboard is. I don’t know why I’d choose this device over a Neo or Air + non-folding phone.
Mentions of the resizable iOS apps seem to signal a desktop dock mode, which ties into your concern.

We know Apple is bringing a folding iPhone through manufacturing leaks. A desktop mode is less likely to be leaked, since it would be mostly software and (a lot) less reliant on third parties.

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