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I didn't find this to be true with the XZ1 Compact, and it in fact consistently outlasted everyone else's phones despite similar use profiles.

I'm still using one, and the battery still lasts 2+ days between charges. All these people saying we can't have a compact phone with decent battery life, a headphone jack and an SD card slot are either uninformed or weirdly disingenuous.

That's good to know. My impression was based on other comments I had read (in particular about the Unihertz Jelly) and it seeming to make sense intuitively.

With regular use the battery lasts about as long as the iPhone 13 Pro, that is to say, slightly less than a full day. But the point of this phone is that ideally you are using it less.

Why not use the third dimension and make it thicker to fit a decent battery?

Thicker would not be an issue for me (up to a point). Especially on a very small phone. Would probably make it easier to hold.