Mostly I just want a phone that is comfortable in my hands.
Is there a significantly reduced bill of materials? At best, the correlation between size and cost is very small. Most of the costs are in software, manufacturing, etc, not in materials.
Also, would there be a better profit margin? I bet customers won’t want to pay the same for a smaller phone, certainly not give that it will have lower battery life (power usage will, at best, go up with screen area, and battery volume will go up faster than phone volume because parts such as CPUs will not be smaller in smaller phones)
Apple tried with the iPhone 12 mini, and the iPhone 13 mini. They were only 5% of phones sold globally, and only 3% of phones sold in the US.
The desire for small phones is an internet thing, but not backed by the market. Take it as a reality check for how internet opinions can be mostly irrelevant.
It's a huge cost for something that sold (relatively) poorly.
Figure most of those 3% would buy a different iPhone model if their preference was not available (not Android, because even if brand loyalty / ecosystem lock-in wasn't so powerful, the Android small-phone options are not competitive).
Then figure that 0.5% (generously!) of lost revenue has to pay for all the custom tooling, parts, manufacturing lines, etc.
... and it all makes an infernal kind of sense.
I'm still anachronistically appreciating my iPhone SE (Gen 1) with a 4" IPS display, Touch ID, Lightning connector, and a 3.5mm audio jack. It's great!
Except that I'll need to upgrade from iOS 15 at some point. :)
People have said this for years, but the mini phones were never going to be instant day-one hits. It's a self-fulfilling prophecy to launch them during Covid, offer them 2 years, and say no one wants them.
Give them a permanent place in the lineup, treating phones like every other very personal device meant for humans. Small, medium, and large.
If you do that, and give people time to see exactly why 5.42 screens are superior to 6.1"+ sizes, then I think the numbers will start to change from what we saw with the iPhone 12 mini and iPhone 13 mini that were launched when people were less on the go than in 100 years.
And no, I don't think a mini SKU can ever beat out the "cheap and big" midrange device that the average person is going to go for. Those will never be beat because they have perceived value. But I would bet in time it comes close or beats the "big and expensive" iPhone Pro Max option.