Modern phones are sold (even at profit) with the intent that there is more payments/ad revenue coming down the line, for movies, TV, games and web browsing/social media. A big screen makes that experience better for people and advertisers. It's a cynical take, but the entire business model is based on building and promoting addiction.
They have no interest in selling phones for utility purposes only, even though that's largely how they advertise the phones, because advertising a 5 hour plus daily screen time isn't sexy at all.