Earlier quoted context omitted.
Selling a new small phone is a market problem for Apple. The form factor inherently makes it less expensive to manufacture. Bigger screens cost more etc. Which creates a pricing problem for them. If they price it like a small phone (i.e. lower price) they cannibalize sales of larger phones with higher total margins, and lose money. If they price it with the same total margin as the larger phones, it'd still be the lo…
Apple is close to solving the market problem with XR being a success. The next interaction of the XS line can offer a smaller version without cannibalizing mainstream iPhones, just like the current iPad line up.
https://9to5mac.com/2019/01/09/iphone-xr-usage-overtakes-xs/
I can't pull up mixpanel trends right now for some reason, but looking at this graph doesn't lead me to believe the XR is very successful.