I would gladly pay markedly more for an updated SE with newer internals, perhaps an uprated camera etc in the same case (that can't be improved) and keep the headphone jack. Especially as small phone choices have dwindled to zero.

Surely not having to redesign case, mechanical switches etc should give scope for more margin, not less?

Yeah, I think they'll keep pushing until they reach max profit. If they go to high in price and profit falls, they have enough cash to ride a year, then they'll release a lower price version and spin it to be something about cost savings in production. Never, we got too expensive and had to back down.

I recently bought iPhone 8 256GB. I paid a lot for it. I would buy iPhone SE, but it's hardware is too old, its fingerprint reader is old and it lacks force-touch. If there was iPhone 8 mini or something with identical hardware, I would buy it for the same price.

What circumstances do you find force touch to be helpful for? It seems to be the only thing really lacking on the newly announced XR phone.

I never had first-hand experience with force-touch before, so I thought it would be an useful feature. I'm using it mostly for moving cursor and occasionally to preview web pages by force-touching the link. Also you can force-touch notification and e.g. type answer immediately, I don't actively chat, but I imagine that there are people who will find it useful. Anyway now I don't think that it's a very useful feature, but it's nice to have it.