- 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'll be blunt: no I won't. I reluctantly bought the phone I still use (a moto X4) back in 2019, at which point it was already getting old. It was one of the smaller Android phones available at the time; I measured it diagonally corner to corner (including bezel) at 159 mm (6.26 inches). The screen size is 130 mm (5.2 in) according to Wikipedia. This phone is in fact much too big for me, and I'm not happy with it.
But I will be sticking with this phone into the indefinite future: until it breaks, becomes unusable, or a worthy replacement arises (a phone the size of the Nexus 5X or preferably smaller, with my must-have features). In the event I can't get this I will switch to a cheap feature phone since I need something for emergency use. I'll look into the mp3 player market to see if there's something I can use for playing music and audio books, maybe if I'm lucky there's something with a nice screen and an e-reader.
I'm sure you're right and some people are more willing to compromise than me. However, what also seems likely is that many people are somewhere in between and will wait until their current phone is unusable before reluctantly downgrading to whatever the latest model is. Surely plenty of sales are lost due to this.
I tried switching to a feature phone and was surprised how often I use a smartphone; and how many people, banks, government organizations, restaurants, etc, assume that you have one.
There are vanishingly small numbers of people who will insist on a perfect-or-nothing approach to smartphones. This market segment is unserviceable. Sure, the size will be right, but it won't have the right battery size, or the battery has to be swappable on-the-go, or it didn't have quite the right sd card option, or maybe the software isn't 'polished' enough, or it had to have two headphone jacks. There will be something 'not good enough' and therefore it's passed over even though they want a 'small' phone.
There is a smartphone that meets the needs of a small-phone purchaser, after all, if small is the requirement - the iphone mini. But purchasing that would require some compromise on your hardline requirements, which will be different to someone else's hardline requirements such as a swappable battery.