And I have to disagree. A fragmented product line is what got Apple into trouble in the first place.
otoh the iPhone SE is why I'm not using some cheap flip phone since didn't want the larger iPhones.
The customer is not always right but enough customers wanting something not broken to be restored --like the 4" phone option-- can be a phenomenon worth exploring. Nothing ventured, nothing gained. If it didn't pan out as Apple wanted, they don't have to update it again. Something as basic as size of the device can't be resolved by just putting an adapter in the box to satisfy customers who liked some feature of a previous rollout, so it probably took Apple awile to research how seriously to take complaints of customers who still wanted a 4" screen on their iPhone. The SE seems to have sold pretty well. Sure it fragments the product line. So what. They met a demand, they used 5S tech that provided an upgrade for people coming from their old 4S or 5C, and they put in touch ID albeit not the 6 version. It sold like hotcakes over the size feature and kept their production costs low for the effort. What's not to like when they can work out something like that.