If it is actually a larger demographic, then it would be huge opportunity for any of these other phone makers, especially those that are struggling. I highly doubt they are all unaware of the opportunity to make a smaller phone, so I suspect they have stayed away because they don’t think it will be a profitable market.

As production quantities go down, costs go up, and with the lower prices that these vendors sell at compared to Apple, their margins are already much thinner, so they have much more risk than Apple in introducing a smaller phone unless they are confident there is a large enough market for it. They simply have much less wiggle room than Apple in which to create a profitable product out of a smaller phone. Since Apple is pulling out and the others haven’t even bothered to try to compete with them in the decade that this big phone trend has been trending, I don’t think there’s any other conclusion that we can draw other than the small phone market is not large enough to pursue, but I’m open to other possibilities.

Edit: Someone else mentioned the small Asus Zenphone, which was also discontinued due to poor sales. That means at least one other manufacturer tried to make a small phone, and they came to the same conclusion that Apple did, so I see even less reason to doubt them.