4.5 - 5" phones are still pretty new, and they're still not remotely the majority of units being sold. Not to mention lots of folks out there have 1-2 year old

4.5 - 5" phones are still pretty new, and they're still not remotely the majority of units being sold. Not to mention lots of folks out there have 1-2 year old phones they're not about to replace (and may not want a 5" screen.) At least for reading, a 7" device like the Kindle Fire is a huge improvement over a 4" phone screen, much more than the simple size difference would indicate. At similar (smallish) font sizes, I can get about 5-7 words across the screen on a phone, whereas I can get 9-12 words on a 7" device. For books, news and movies, a size increase of about 75% is a big deal.