I think the most important reason of having bigger devices is performance vs battery.
You can not extend a smartphone and give feature like OLED, Neural Engine etc without considering affect on the battery.
They want bigger device to solve many those issues. If they release the iPhone SE update they can not compete with other iPhones in terms of feature and performance.
Also it have huge involvement of iOS updates also. When they release iOS update you have to think all the device these updates support else people will make noises.
You can not extend a smartphone and give feature like OLED, Neural Engine etc without considering affect on the battery.
They want bigger device to solve many those issues. If they release the iPhone SE update they can not compete with other iPhones in terms of feature and performance.
Also it have huge involvement of iOS updates also. When they release iOS update you have to think all the device these updates support else people will make noises.