- 1. Supply chain / component R&D -
You will be very, very hard pressed to source a pre-existing, high quality, non-exclusive 5.4" display with a hole punch. If you end up doing this as your own startup then you're going to start by trying to buy off the shelf parts to keep costs down. But that display you want is simply not on any of the development roadmaps for the major component manufacturers. The industry has its own momentum, and the component suppliers have also been looking at the trendlines so they are building bigger and bigger.
If you can't find the screen you want in a catalogue then you have to pay someone to build it. Convincing BOE et. al that your phone will sell enough to pay off R&D costs is unlikely, so be prepared to pay several million bucks in NRE to make it worth their time (it might still not be) and the wait a year for them to spin up the fabs. So ~$5M and 9-18 months later you have a display.
- 2. Big players are uninterested, not uninformed -
Big companies are drowning in market data. They know some people really, really want small phones. But it's a long-tail opportunity they're willfully ignoring, and people who need phones will still buy something even if reluctantly. I've been in the meetings, small phone advocacy goes nowhere.
Also I'm a little surprised you're hoping an online petition will work after your prior experience trying to influence your acquirers. I presume you saw the inside of Fitbit / Google and how decisions are made...
I would argue that they don’t know what people want at all, since market data just reinforces previously held assumptions. For example if you surveyed people in 2006 what kind of phone they wanted, most consumers would probably ask for a better flip phone. It wasn’t until Apple came along and defined a new market that Smartphones even became a thing in the mainstream consciousness.
And as OP pointed out, Apple makes a smaller screened smartphone, so they exist. In some comment on this post someone said that it accounts for 3% of Apple's phone sales.
How big is the group of people that want a smaller smart phone but aren't willing or able to switch to Apple? Who knows. My intuition says not many, but maybe we'll find out through OP's efforts. I'm an iPhone user and the only reason I haven't switched to something like the iPhone Mini is because I want the better camera on the pro's.
It targets people that have plenty of cash for a flagship but are willing to forego the top tier specs for a smaller size. Apple prefers you just buy the pro. And if you don't have much cash you can get the reheated 2017 iphone 8 with SE slapped on it :)
I bet if they made a mini T the price of an SE with a more limited camera and screen spec than the current mini it would take 50% of SE sales away.
You can't judge the market viability of one aspect based on a single model.