Mass production of the new 4.1" panels is expected to kick off in 2016.
Prior to the new prototype, Sharp's highest-density IGZO unit was just under 500 PPI. New, ultra-small pixels enabled the jump to a higher resolution. According to an image posted by Gizmodo, the prototype's RGB clusters are just 11.5 µm wide—less than half the width of the 27-µm pixels found in older 4.7", 720p smartphone displays.
Those 11.5-µm pixels will likely be impossible to see with the naked eye. Higher pixel densities can make images appear sharper and more detailed even when the individual dots are too small to be visible, though. The returns from ever-higher-density displays may not diminish as quickly as one might expect. That said, higher-density displays typically require more power to achieve the same brightness levels.