We use 0603 SMD packages but the electronics world uses much smaller sized components.
We use 0603 components on 99% of the 500+ SparkFun products we produce here in Boulder, CO. When I show tour groups how big an 0603 resistor is their minds are blown.
0603 components are actually pretty large in the electronics world measuring 0.063 x 0.031" (1.6x0.8mm). Cellphones and wearables are built with components down to the 01005 package (0.4x0.2mm!). To show this we decided to order some of the itty bitty bits and for scale, we threw in a grain of sugar and a Lego minifig. But don't let the size of the minifig's tiny hands throw you off.
With a stencil and solder paste it's possible to hand place and reflow 0402s. However, hand soldering anything smaller than an 0603 becomes problematic because the iron tends to simultaneously heat both ends of the component causing the component to adhere to the iron tip. 0201s and 01005s are so small that it's maddening manipulating them with tweezers. We won't be doing any products with grains of sugar anytime soon but it's interesting to see just how small components need to be to fit supercomputers into our pockets.