Unfortunately that compact strategy doesn't work in the market, just ask Sony. Sony has been making compact phones with flagship specs for years without much success. The phones are great, too (good feel, more than powerful enough, great battery life, minimal android mods, etc). But they just don't sell. Everyone wants the latest and biggest Samsung. Sony hasn't been able to carve out a profitable niche here.

I have a Sony compact and people are constantly asking me questions about it with intrigue then shrug their shoulders and go back to their giant phones.

The main knock against Sony phones is the camera quality, which they intentionally nerf in order to not damage their DSLR business.