It should be obvious by this point that the Sony Xperia ZR is not just another shrink-to-fit exercise like most of them minis. Instead of focusing on size, Sony chose to put the specs first, take it from there and see how compact it can get.
The result may not be as small and portable as the Galaxy S4 mini, but unlike that one, the Xperia ZR is a proper flagship. It not only matches the Xperia Z on most aspects, but it even scores several crucial victories that may as well make it the most desirable Sony smartphone at the moment.
The lower resolution screen makes it the better performer despite the identical chipset, the water protection is taken to the next level and the battery is not only longer-lasting, but also user-removable. If it wasn't for the sexy glass finish, that makes the Xperia Z the better looker, this would be one-way traffic all the way.
And, yes, the display has been downgraded to 720p, but at this size the difference is so hard to spot that you are better off saving precious GPU resources and battery juice than playing by the numbers. We didn't particularly miss the 2MP front-facing camera either, as most video-chat software doesn't support particularly high-quality video anyway.
So for anyone not too obsessed with looks or video watching it's easy to recommend the Xperia ZR over its premium sibling. You'd be getting a more flexible device, while saving yourself a few bucks to spend on a larger microSD card. A 4.55" screen is not as nice for enjoying movies on the go as a five-incher, but it's still pretty good.
An interesting, if rather exotic, alternative to the Sony Xperia ZR is the LG Optimus GJ. The waterproof version of the Korean company's soon-to-be-ex flagship is a tad larger than the Sony smartphone, but packs the same processing punch and has a screen with better viewing angles. It only has IPX7 protection though and isn't the easiest handset to find this side of the Urals.
Assuming water-protection is what brought you to the Xperia ZR, Samsung has a couple of devices you might want to check out. The Galaxy S4 Active is way larger though and it will cost you more than the Sony smartphone, while the Xcover 2 can't hold a candle to its screen quality or processing prowess.
And if it's the flagship experience in a more compact package that you are after, you might want to give the Samsung Galaxy S4 mini and the HTC One mini a try. Those two are certainly smaller than the Xperia ZR, but even if they look and act the flagship part, they don't have the internals to back it up.
The final two devices that might give the Xperia ZR a run for its money are the LG Optimus G and its Googlified Nexus 4 version. Packing the same chipset as the Sony and offering 4.7" screens of the same resolution, those two lack both water protection and memory expansion options. They do have the advantage of being significantly cheaper though, so they might attract bargain-hunters.
So at the end of the day, the Sony Xperia ZR remains the most compact Android smartphone to deliver the full flagship experience. And as if that's not a great place to be already, the IP58 certification, the microSD card slot and the user-removable battery take it another step forward. With Sony already committed to updating it at least through Android 4.3, it's really one of the easiest smartphones to recommend.