I have been using phones from all sizes from 3″ to 6.7 but I felt in my experience that the size is one aspect, as phones were equally good at they basics when it was iphone 6 and 6s or iphone SE 2nd gen 2022.
Despite of compact size they were no less of all day company.
Now just coz of some additional macro or zoom and gaming experience the battery is being considered as major factor to increase phone size.
If Nothing is really working on this side, it could be a category which will have certain share.
I will be one of them who would want a compact 5″ phone with good camera setup may be same 8K series mediatech chip and a decent battery of 4500mamp to complete a day.