Small phones are most definitely not popular.
- Smartphone design goals are to cram as much into a phone as possible, so engineers prefer having more space to work with.
- If I'm a designer for a smartphone, I'm probably pushing for more screen real estate to work with
- If you can only pick 2-3 form factors to build with massive economies of scale (as Apple in particular has to do), the demand for a smaller screen might not align with the relative cost to produce
- I wouldn't be surprised if the "it's smaller so it should be cheaper" mindset that people have in other markets (cars come to mind) plays a factor here. The reverse would be true true: A company can charge more for a bigger phone because it's bigger.
So if, say, 20% of the market wants a smaller screen size but wants it done cheaply, there might not be enough incentives to mass-produce such a device in a way that makes enough money to be worth it.
The only thing impacting my phone purchases these days is the camera, which like you said, the good ones only come in 5"+ screen sizes.
https://www.theverge.com/2019/2/6/18212311/palm-phone-review...
> This phone is repeated called small in reviews.
It's repeatedly called a few more things in reviews as well.