There certainly was some market for a small phone, although how much is beyond my current knowledge. It's definitely a niche market segment.
I think Apple's misstep was to make it a small version of the yearly models rather than a nicer version of the SE. The SE is on a 2-3 year cadence rather than yearly, and the hardware in the 2022 SE is very similar to the 13 mini. So I think the angle should have been to market the SE in 2 flavors: the current "Touch ID" model with hella bezels for US$429, and a "Face ID" model (the "mini") for US$499 or $529.
It could keep just the single camera, notch instead of "Dynamic Island," no MagSafe, worse screen and glass, etc.
This wouldn't eat into the market for the more expensive models while still delivering enough performance for most people. Sure it wouldn't please the "literal flagship, but smol" crowd, but would have reduced engineering and make inventory easier.
I think Apple's misstep was to make it a small version of the yearly models rather than a nicer version of the SE. The SE is on a 2-3 year cadence rather than yearly, and the hardware in the 2022 SE is very similar to the 13 mini. So I think the angle should have been to market the SE in 2 flavors: the current "Touch ID" model with hella bezels for US$429, and a "Face ID" model (the "mini") for US$499 or $529.
It could keep just the single camera, notch instead of "Dynamic Island," no MagSafe, worse screen and glass, etc.
This wouldn't eat into the market for the more expensive models while still delivering enough performance for most people. Sure it wouldn't please the "literal flagship, but smol" crowd, but would have reduced engineering and make inventory easier.