I doubt Apple could sell more than a few million 4” iPhones at $700+. The iPhone “SE2” is projected at 20-30 million first year sales.
You might think 3.5-4.0” is reasonably sized, but it’s small in today’s marketplace. Most people want a larger phone than that. I don’t see how flagship tech fits in a 4” iPhone in any case.
I really have no idea how many they might sell. It's popular to say "Apple couldn't sell many or they would make it", but I often hear (anecdotal, to be sure) from ppl who say "I hate buying a phone this big, but it's all they make...", so I don't think that sales of large phones necessarily means that that's what the markeplace wants...it's just all that exists today. And I know that many want a large phone, often because they can't afford multiple, specialized devices (phone, tablet, laptop, desktop, large TV with Apple TV, etc). I think the 4" or smaller phone is a luxury that few can probably afford, so perhaps it's a niche Apple doesn't care to serve.
I do think flagship tech could easily fit in a 4" phone. Remember, the SE is a nice, hefty, thick phone. I hate thin, lightweight phones that compromise battery life, have inelegant camera protuberances, and slip out of your hand easily. Add a couple millimeters thickness and return to the heavy, quality chassis of years ago, and it would be a cinch to incorporate flagship tech and longer battery life than today's gargantuan screen phones.
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Whilst I don't disagree at all with your sentiment, the cold reality (for you) is that the market for such a device must now be so vanishingly small that to design, develop and tool for production whilst still making a profit on each unit would mean you'd have to pay extortionate sums of money for one. Of course, that may change in the future, but right now the trend is for ever-increasing screen size. Sadly, market forces have killed the 4" phone. And for the time being at least, there's no sign of it being resurrected.
agreed. i'm still sad