The answer is right in front of you but most SE enthusiasts are simply blind to the obvious. Apple’s own actions speak louder than words.
4” form factor is a dying breed.
The 4.7” and larger devices have already replaced 4”.
There’s this endless argument that some people want 4”. There also people out there that want 3.5” phones and 11” MacBooks. That demand is dead or dying.
That's quite amusing actually.
The 4" screened iPhone is still in production and has to this date still outlasted production length of the 4.7/5+" iPhones to date.
Furthermore, Sony still satisfies a decent market segment of those that want a 4" smartphone globally, even though they're not even the top 8 smartphone manufacturer. They operate at a loss each year in the mobile space, paid for by their TV, Playstation, Movie, Camera, and Music business (in order of profitability I believe). The Mobile arm is a technology showcase for their Camera Sensors (for prospective clients: Apple etc) and their LCD screen business (1st real 4K resolution screen, pixel density, switching or arrangement of pixels etc).
The 'Compact' line of their smartphone doesn't even sell as much as their more budget or high end models yet it still packs to the features of the top tier phones - only 1 year did it not make one 2016, and yet Sony still sees a business sense to continue making the Compact lineup 2017 onward.
So I ask you to do further research and see why Apple would see reason from their users why a 4" screen phone makes business sense going forward? Not just the size ... but it's the cost of manufacturing, and retail cost to consumers in regions where it's a viable sale option vs no option (India, Indonesia, Brazil, etc).