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Beat the System: The real reason Apple hasn’t launched a pocket-sized iPhone

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Apple’s new iPhone SE2 is stunning. The slim, elegant successor to the defunct SE clocks in at less than 5 inches long and 2 1/2 inches wide. It’s 40% smaller and lighter than the flagship iPhones, the XR and XS Max. But thanks to the new edge-to-edge design, this pocketable little phone still boasts a screen size of around 5 inches.

The only problem? The iPhone SE2, alas, doesn’t actually exist. And the Apple AAPL, -0.13%  rumor mill, which is usually pretty reliable, is not predicting Tim Cook to unveil one with the new iPhones at the Sept. 10 launch event.

Instead, the SE2 — or, possibly, the “XE” — has been imagined by Apple fans who are jonesing for a return of smaller, more elegant phones in an era of big and bigger “phablets.” For example, the gorgeous photo above is a screenshot from the YouTube GOOG, -0.40% GOOGL, -0.31%  channel EverythingApplePro. The video on “The Forbidden iPhone SE2” has attracted 2.5 million views, 36,000 “likes” and 3,400 comments.

That’s quite a lot of interaction for a video about a phone that doesn’t exist.

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There are plenty of Apple fans who would like to see a return to a smaller, more elegant iPhone like an SE2. The original SE, which was in turn modeled on the older iPhones 4 and 5, was one of the more gorgeous phones ever made, its most ardent fans say. They said there’s an elegance and convenience to the smaller model that is very different from the big new phones.

Apple discontinued the model last year and they’re starting to become something of a collector’s items. You can still buy them on eBay EBAY, -0.25%  for about $250, even though they’re now nearly four years old, and use a chip launched in 2015.

The SE had a 4-inch screen. The current XS is up to 5.8 inches, while the XR is 6.1 inches and the XS Max a thumping 6.5 inches. The newer models are terrific as portable video players, gaming devices and even computers. But they don’t slip into your jeans or shirt pocket with quite the same ease.

(Apple could not immediately be reached for comment. The company typically does not comment on rumors or on forthcoming models).

Some calculations show that a new SE using the same edge-to-edge screen technology as the latest iPhones could fit a screen of about 5 inches diameter into the same form factor as the old SE.

Frank Gillett, a technology expert at Forrester Research FORR, +1.10%  , says there’s a core group of smartphone users who still want a small phone. “I have friends and family saying to me, ‘I like these small phones, can I have another one?’” he says. He says surveys have found an estimated 15% of the population want a smartphone with a screen of 5 inches or less.

But he says he hasn’t heard any rumors of a smaller iPhone in the pipeline, and he isn’t holding out too hope. The reason? Economics.

If 15% of the population say they want a small phone, probably only about 10% would actually buy one, he suggests. “Apple really built itself on scale,” he says. “They don’t like 10%.” As people now typically replace their phones every three years, the actual size of the potential market probably just isn’t big enough for Apple, he adds.

And if Apple wanted to make one using the new edge-to-edge screens, it would need to engineer it from scratch, Gillett says. “They would have to go through all the engineering and design costs, and set up a separate manufacturing supply line. So they’re unlikely to go for it,” he says.

The old SE, by contrast, was basically some newer components shoehorned into the old iPhone 5 chassis, he says.

And why should Apple make an SE2 anyway? The company hardly wants its higher-end customers trading down to a smaller, presumably cheaper phone. And the bigger your phone, the more likely you are to pay for more media subscriptions.

The more intriguing question is whether we will see small smartphones on the rival Android platform. As there are so many manufacturers, some may go after that estimated 10%. So far, specialist technology website GSMarena.com shows just 10 Android phones with screens of 5 inches or less that run the latest 9.0 version of Android. Of those, the Sony XZ2 Compact SNE, +0.33%  comes closest to the size of the old SE.

But it costs about $600. And, of course, it’s not an iPhone. Apple fans jonesing for a smaller phone may be faced with the unthinkable: switching to another manufacturer.

Shares of Apple are up 31% this year compared with a 13% increase for the Dow Jones Industrial Average DJIA, +0.16%   and a 16% gain for the S&P 500 Index SPX, +0.06%