Videos are limited to a max resolution of 1024 pixels on their long side, but iPhone 4 is limited to 960 pixels on the long side. We do make a special exception for images that are already in a 16:9 aspect ratio. Those videos will output at full 1080p.
The above limitations cap the video size, but if the original image you load into Matter is lower resolution, then the output will match that smaller resolution.
If you're emailing your videos or uploading them using another app, iOS may automatically downsize them. The best way to get videos off your iPhone is to import them using a USB cable and iPhoto or the Image Capture utility.