I don't know. But if smartphones are to be a pocket computers for apps and all sorts of things, miniature 4" display is not gonna cut it for most people. I don't use phablet but I can see a lot of them being used. Sometime I think I see more phablet being used then 4.7". People want one pocket device that does almost everything. And small screens just don't seem right for that purpose.
That's the argument against the Apple Watch as well. Yet Apple is rumored to be planning to add an LTE radio to it, so that it will act as a standalone device without an iPhone.
If what you are saying is right for the majority of iPhone users, then there would be no need for an Apple Watch that doesn't require an iPhone.
The reality is, except for those who carry their phones in purses and briefcases, smaller and more compact is always going to be better for a mobile device, and that's why the Apple Watch is headed the direction it is. I can imagine a future where carrying around a flexible, or foldable, display is an option for people to use with their watch if they need significant screen real estate while mobile. Many others will chose to make due with their watch, or watch-sized device.
In my case, the SE is the smallest iPhone I can buy. If I had my way, I'd still be using my 4s. I don't have any problems with the SE screen size at all. For some apps I'd prefer the same information as the 4.7" iPhones display even if it appears smaller. But I don't need a physically larger screen.
Phablets exist not so much because people were demanding larger screens, though I do know some older people with weaker eyesight who prefer them specifically because of the size, but rather it allowed the phone makers to pack the larger case designs with more features. And now people are used to larger screens. But it doesn't mean most people actually need them.
The Apple Watch is a sign that the pendulum is swinging back the other way. If Apple manages a bezeless 4.7" phone, it will be physically smaller than the SE. Apples goal is to make a phone that hits a sweet spot that is as functional to as many people as possible while also being as portable as possible for a mobile device. Increasingly larger phones don't really walk that line very well, and those desiring a smaller phone aren't being served adequately right now. But the success of the SE demonstrates there's a demand for smaller devices. The question is, how will Apple address that? At the moment the further appears to lie with the Apple Watch.
