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If that device ever becomes a reality it will IMHO blow everything away. I love big screens ( 720x480 would rule ). And the option to buy it without a digicam is just cool ( i never use those cheap ones anyways ).
First off, your post is off-topic since it is little more than an advert for a completely separate device. Ignoring that, and bringing things back to the Archos 604...
I like the way that Meizu thing looks better than the iPhone, but I don't see any other really good reason to get it. The dimensions and resolution trump the iPhone, but I couldn't seen any other info about actual hardware capabilities such as processor speed, built-in memory, or WiFi. In addition, it runs Win CE. I've had Windows Mobile for the past few years, and the only thing that I can say that I really preferred was contact navigation. That single benefit is lost/obsolete with a touch screen, and there are multiple things that I don't like about Windows Mobile.
I do think that if someone can make a product that works well as a phone and a portable media device, they will do very well. The iPhone proved this, but for my money the iPhone still falls short. From the meager details that I found about your device, I have no reason to think that it will fill that niche completely either. So, in the meantime there is plenty of room for specific-use devices.
The 604 is a specific-use device. Archos has traditionally made some of the best video devices anywhere. As stated in the article, they are continuing that tradition here. Other devices really don't compete when it comes to video codec support. Try putting video from various sources on just about anything other than this and you'll quickly see how attractive it can be to own a device that doesn't force you to convert files before loading them.