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.
Phone screen sizes grew as the applications that could use screen space grew in demand.
People are watching 1080p films on the train now. The people who want smaller screens are usually willing to deal with a larger one. People who want larger screens usually cant operate their use cases on a smaller screen. Larger screens also tend to mask larger case meaning less miniaturisation required for the components.
You have people who want them unusably large and people who want them to fit in your hand. The solution in every other market is that products are manufactured to fit both sets of needs. You don't see pants coming in one size with the advice "wear a belt".
What's going on?
You're in a minority, it's not profitable to cater to you, and most people don't care.
That's the cold hard truth of it.
Perhaps... just perhaps... the explanation lies elsewhere?
I should have included some kind of question as to what it might be.
"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.