Apple's homepage says iPhone 12 starts "from $699 before trade-in." There are plenty of consumers who want a current generation 5G iPhone at an entry level price.
It's not black white. There are $399 shoppers an there are $699 shoppers. Both of them can be frugal.
I suppose that's possible, but given the importance of screen size, most would probably spend the extra $100.
(There's nothing special about 5G, but I'll give you that the average consumer doesn't understand that, and Apple was certainly pushing it. But, again, I don't think the primary sales-point of the mini is price, just because Apple lists a 'starting from'.)
... which means the mini outsold even Samsung’s flagship models. I have no doubt Apple is proud of that fact. The only way to spin the mini being the 6th most popular smartphone as a bad thing is by being intentionally absurd.
And a straw man, in that I don't remember anyone ever making the argument it was supposed to turn out as outselling the other models in the lineup. I suppose one could have debated whether the Pro or mini would sell more, but given the camera advantages, I don't think anyone would have debated that.
It's one of these things again where Apple's 'failed' product sells better than most whole other companies' enter product line. If that's a failure...
(That said, looking at the chart above, I am surprised the Pro and Pro Max combined sell so many. I'd have thought the regular 12 would outsell them by more than that. I guess that comes down to the camera?)
Apple is not in the business of selling semi-successful products. The HomePod wasn't successful, so they discontinued it. The 12" MacBook wasn't selling, so they stopped making it. If they tried making everybody happy, Apple would be like Samsung and have countless models launched every year.
Sure they are, cf. Mac Pro, Pro XDR, Mac mini, Apple TV, Hermes Apple Watches, etc. How many of the big iPad Pros does Apple sell compared to the rest of the models?
The HomePod failed because Apple made it an overly-expensive streaming/smart-speaker, when the competition were practically including them in cereal boxes. If it had an aux-in, it would have done much better, as it would have been useful (or if it had a good digital assistant, but that's a whole other issue). The 12" MB didn't work all that well for a number of reasons.
The 'try to make everyone happy' is a silly argument, as that isn't what we're talking about here. Of course Apple isn't going to make every crazy product to suit everyone. But, they need a reasonable range/line-up for a product that covers the market and use-cases.
Again, i'll go back to the SUV/sedan/pickup analogy. Everyone isn't going to drive an SUV just because they are (currently) most popular. And car makers would be hurting their customer-base if they decided to cut the 'failures' based on sheer numbers.