For those disheartened by the discontinuation of the big HomePod, I'm thinking that this is just step one of a wider plan for the HomePod brand as a whole.
Here's my two cents:
For Apple, the HomePod mini serves as a 'reset' of the HomePod brand.
They're probably looking at the lacklustre performance (by Apple standards that is) of the original HomePod, as great as a product it likely was, and realising they made a few mistakes when it came to marketing it. Therefore I reckon HomePod mini serves as a step back and a fresh start.
Let's face it, most consumers just didn't want to spend that amount of money on an Apple smart speaker when, at that time, Apple had never ventured into the smart-speaker market before. Amazon and Google had pipped them to the post with far more accessible products, and Apple most likely hoped their brand power and sound quality would pull them through. Sadly, it doesn't look like it did.
IMO Apple should have released the HomePod mini first, as the 'regular' HomePod, and then the larger HomePod later on (probably marketed as a 'pro' or 'max' model). They most likely realise this now.
Think of it this way:
Let's say, for example, Apple released the AirPods Max in 2016 as opposed to the 'regular' version we got. People would scoff and say there's not a chance in hell they'd pay that much for a pair of bluetooth headphones.
Apple didn't do this, however. As far as AirPods were concerned they were very smart: release the entry level model first, make it great, make people fall in love with it and want more. Then give them more. Give them the Pro, give them the Max, and they'll lap it up because by that time the AirPods brand will have enough momentum going that people won't mind spending over $500 on a pair of headphones. They won't just be any old headphones after all. They'll be 'AirPods' and that matters hell of a lot.
If the HomePod mini really is as big of a hit as they say it is, expect them to release a few more revisions of it, making it more popular as they go along. Then, like the AirPods, expect to see 'Pro' or 'Max' models, effectively filling the void left by the discontinuation of the big HomePod we've had up till now. I reckon these hypothetical 'Pro' models will end up being far more successful then, because they'll have a strong level of customer loyalty with the HomePod mini, and a lot of momentum to push them forward (like with the AirPods).
EDIT: The more I think of this, the more I think of myself as a suitable example to illustrate my point above. I never had an original HomePod - my first HomePod was the mini. I never even entertained the thought of getting a HomePod, and that's despite being deep in the Apple ecosystem for over ten years. The price was just too high for something I wasn't sure I was going to use to it's full potential.
When the HomePod mini was announced, the £99 price tag was just right. It was cheap enough for me to 'dip my toe in' so to speak. Once I got the HomePod mini, I loved it that much that I had every intention of getting the big HomePod - a product I'd previously written off suddenly came into the centre of my radar.
I was waiting for the HomePod to get refreshed first, knowing the original was getting long in the tooth. We know now that's not gonna happen, but if Apple later announce a 'HomePod Pro' or 'Max' I'll be right on it. And none of that would have been the case if not for the mini.
I'm sure the above scenario will be similar for a lot of consumers.