> In fairness, 4.7 inches is now a very small phone. So small in fact that you have basically no options that small in the Android line, and no recent iPhones that small either, if I'm not mistaken.
You have to look at the physical dimensions though. A 4.7 display edge-to-edge would be truly compact, but this one has a huge bezel so it's closer in size to the flagships and not really compact.
It's obviously a profit motive. They can charge more and have to spend less on R&D since they don't have to try to squeeze all the hardware into a small form factor. Not to mention there is no competition that could eat into their marketshare since nobody is making small phones.