I don't think it's meaningful. There are not enough people who would buy such a device to make it profitable to design and manufacture. Your priors -
"You have ... people who want them to fit in your hand"
Are incorrect. The number of people who will actually buy small devices is ... small. The number of people who are so interested in small devices they'll overlook things like a lower battery life and whatever other compromises are needed to achieve the smaller size, likely even fewer.
It's not like it hasn't been tried in the past, people in this thread talk about iPhone minis disappearing - Apple couldn't make them a success. Sony couldn't make them a success either and stopped making them AFAICT. As a market segment you're too small to warrant the investment in designing a small flagship. And if nobody's investing in a small flagship, small midmarket isn't going to happen either.
There do appear to be niche manufacturers in this segment (take a look at https://www.reddit.com/r/smallphones/). If the untapped demand is so huge, I would expect to see them become much more mainstream over time.
Unless you're asserting the number of people who will actually buy small devices is zero (which I would hope you aren't given the evidence to the contrary in this thread), his priors are in fact correct. If there exists any number of people willing to buy small phones, then the statement "you have people who want them to fit in your hand" is true.
> If there exists any number of people willing to buy small phones, then the statement "you have people who want them to fit in your hand" is true.
But the subtext is that this is enough of a population to make a viable market, that in fact any number of people, however small, make a viable market. It's just not a reasonable prior.
So I'm asserting that it may as well be zero as far as the big manufacturers are concerned, that with such a small audience it's not profitable. Further, that this dynamic does indeed play out in other markets.
OP is looking for a conspiracy as to why phone manufacturers are leaving money on the table. The truth is they aren't. This situation is exactly what you'd expect when there's no real market - a few niche providers making a few niche products for die-hards (without the scale, support or quality of the majors) and not making a lot of money at it, while the rest of the market ignores them.
"You have ... people who want them to fit in your hand"
Are incorrect. The number of people who will actually buy small devices is ... small. The number of people who are so interested in small devices they'll overlook things like a lower battery life and whatever other compromises are needed to achieve the smaller size, likely even fewer.
It's not like it hasn't been tried in the past, people in this thread talk about iPhone minis disappearing - Apple couldn't make them a success. Sony couldn't make them a success either and stopped making them AFAICT. As a market segment you're too small to warrant the investment in designing a small flagship. And if nobody's investing in a small flagship, small midmarket isn't going to happen either.
There do appear to be niche manufacturers in this segment (take a look at https://www.reddit.com/r/smallphones/). If the untapped demand is so huge, I would expect to see them become much more mainstream over time.