Development board with cellular capabilities smaller than Arduino
Firstly, you have to accept that your device will be bigger and more expensive than a comparable cellphone.

If you want to assemble something out of modules, you're already at the smallest point. To get smaller, you'll have to do your own PCB and attach a suitable GSM module and microcontroller. (You can get programmable modules which may suffice: Sierra Wireless "Open AT" for example)