I understand that Apple did not make enough money to make it worth their while to continue the iphone mini line. However, it does seem like there is a profitable business for someone there given how beloved it was/is.
I only traded out my iphone 12 mini just recently for an iphone 16 pro (likely the last apple product I will ever buy but thats another story) and aside from the camera it is basically the same. Just heavier, awkward to hold and slightly worse designed.
No major player wants a smaller screen because it has downstream impacts on the pipeline of addictive material and ad pixels they can stuff into ocular nerves.
The first phablets were probably the Galaxy Note line starting in 2011 which was met with some skepticism due to the size of them. These were well before the edge to edge screen days. So you had 5.7 inch screens with a bezel.
They were huge but I would routinely see small women pull these things out of their hand bags and press a device that obscured almost their whole face and start chatting.
Things steadily got bigger from there. The general population WANTED this.
General population doesn't buy phones every year and they don't want a nerfed phone when they have to pay 500-1000 $/€s. So they gravitate towards higher end ones.
Companies including Apple has always treated the small size as an entry to mid segment phone. The only exception I know is Sony z3 and z5 compact which suffered heat and battery swelling issues due to Qualcomm messing 810 series SoCs up.
Companies also want you to buy the most expensive phone. So they market the premium models and train their store personnel to sell more of the premium line. If they stop intentionally nerfing the smaller phones, I think there is a market there. However, it will still be smaller.