I think another factor is how consumers behave. If there is no “smallish” iPhones I suspect MOST potential customers of “smallish” iPhones will just grind their teeth and eventually just go ahead a buy a bigger iPhone anyways.
Apple has 99% customer satisfaction worldwide.
So since long time they are inclined to Apple services like :
Synced iCloud iPhone system-wide settings.
iCloud storage.
iCloud Keychain.
iOS security & features.
Apple Movies & TV shows.
iTunes.
Podcasts.
Apple Home hardware accessories.
Apple Watch.
AirPods.
Find my.
Continuity which works seamlessly across all apple devices.
And the list goes on…
So, when a customer moves to a newer model, he don’t have to start all over again rather just restore from iTunes backup. Everything u have synced since many many years will come back as a copy and is not lost.
On the other hand Google couldn’t digest iOS introduction to the world which reinvented smartphones during the era of mobile phones, and after 3yrs later it completely stole iOS platform and introduced Android.
Google is made of bunch of hackers. They really steal users data and misuse it.
I understand the pricing of iPhone compared to android. But the innovation is far beyond others in the market.
They introduced 720p “true HD” video recording camera on iPhone 4 2010. All the HD standard were there on an iPhone compared to Androids fake Color just dimensioned 1080p camera phones.
Steve jobs truly reinvented Apple from the ground up!