Start from the beginning, which is use cases. Write a list of step-by-step tasks that are going to be prformed with your device. Then, look at the hardware requirements. What hardware is going to be used on each step, how you're going to mount it on your device - switches, batteries, modules, antennas, whatever. Hardware must meet all the use cases and at the same time should fit in into the allowed space, not get in the user's way. At the same time it must meet the allowed budget.
Microcontroller comes last, when everything else is known.