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The device has an all metal and glass body, while the device takes it up a notch with a screen that bends over the edge of the device.

"Take it up a notch"

I have seen some awkward expression and I was wondering if "it" refers to something mentioned before or the expression itself is an idiom and it takes the position without referring to anything.

What do you native English speakers think? Thank you so much as usual!
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It's an idiom, which has its origin in a ratchet device for controlling the level of operation of machinery. The "it" has been transferred metaphorically to whatever process is the subject of the increase in level. In your example it's the design appeal of a smartphone.
Comments  
"To take it up a notch" is an idiom meaning something like: "to enhance." So the sentence means something like: "The device has an all metal and glass body - pretty standard and run-of-the-mill for an electronic device today - but the device does has something quite innovative: a screen that bends over the edge of the device."
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 deadrat's reply was promoted to an answer.

The idiom "take it up a notch" originated from many common machines and devices that required an adjustment to be set by the person using it. The adjustment would be held in place with a pawl or pin or ratchet that clicked into a notch. There would be several notches to provide a variety of settings. For example:

1. The speed adjustment on a food mixer.

2. The height adjustment on a car axle stand.

3. The height on a deck chair with a canvas seat and folds up flat.

The notches prevent the adjusting part from vibrating loose and provide a range of adjustment from low to high.

You can dream up countless etymologies for words and expressions. People have done that throughout history, and their efforts are often quite entertaining and inventive. The trouble is that to prove that an etymology is true, you have to show that the word or expression did not exist before your imagined origin, and that the person who first used it did so according to the plan you have conjured up in your mind. That is a tall order, and it can only rarely be filled. I can think of as many theories about notches as you can shake a stick at, which expression, incidentally, was first used in 10,004 B.C. by Og the Hirsute when he kicked the beehive in what is today Lower Slobbovia.

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