You're right, location services and gps will allow devices other than the iPhone 4 to install your application. You could choose some other function, although you know that it is an exclusive iPhone 4, for example, a flash camera or a gyroscope, and demand it.
I'm not quite sure that the apple will frown over the restriction without apparent need, but the gyroscope seems to me a likely limitation in an application with navigation support. If you try this approach, I would explain things in the text box for comments to reviewers. Another caveat is that you risk that the future device will not βfit inβ - a hypothetical iPhone mini, which will show regional monitoring, but without a gyroscope or camera flash, will not be able to install your application, for example.
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