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I am having an LCD with a resolution of 640x480. What is the relevance of pixel per inch for an image to be used for developing a GUI in this LCD? This image is not going to be used in any other LCD's with different resolution. According to me , this option is irrelevant as actual pixels per inch is constant in the LCD .

But I found that in GIMP we need to give this option to create an image. What value should I give for my image ?

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  • as said in the answers, PPI is only important for printing purposes. 72 (usually the default) is fine. – Luciano Jan 22 '16 at 10:44
  • Note that the ppi setting may influence some of the plugin/effect/text rendering, but that will depend on the software and the plugin tool. – Yorik Jan 22 '16 at 20:09
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As you said, the ppi is irrelevant, because you're not actually printing anything. For your purposes, ppi is just a meta-tag that won't change anything. (See https://bjango.com/articles/ppiisatag/)

I would just leave it at the default of 72.

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The value of “72 pixels per inch” does not actually refer to a display with 72 pixels per inch. It means “1:1 pixel ratio” or “show each pixel of this image on one pixel of the display.” It is essentially a zero point on the resolution ruler.

So when you don’t care to specify a pixel per inch setting, you use 72 pixels per inch.

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