There haven't really been many attempts at making small flagship-quality devices in years. Didn't the SE immediately sell out when it was released? I struggle to believe no similar market exists today, but Apple obviously has a easier and more profitable path maintaining the device collection they announced today. I just wish they didn't.

I was thinking about replacing my SE with whatever was announced today, but instead I'll be continuing to use it until it dies/isn't supported any more. Maybe I'm alone on that, I dunno.

If you want to push margins, larger devices selling for higher absolute prices are a better option.

Imho, it's harder to convince people a "smartphone" is worth USD $1k+. But a laptop / tablet replacement? That's reasonable(!) compared to a MBP...

Given Apple's build costs don't scale with device size (++screen, +battery, +gpu/mem), selling the same internals in bigger devices for more is a win.

So you continue expanding device size and price until you discover the market boundaries. And unlike Samsung S*/Note, Apple has the ability to say "These are the only form factors this generation, if you want the newest iPhone..."

Apple wouldn't leave money on the table in an effort to save face. It came out in the Apple vs. Samsung lawsuits that they were caught flat footed.

From a technical standpoint, they could have released larger phones before they did. What stopped them is that UIKit and iOS apps were not designed to handle multiple screen sizes or any screen except for the 4 inch iPhone and the 9.7" iPad until iOS 7 and support improved in IOS 8.