I do not think that is really the case. What actually happens is that smaller phones are often worse, i.e less battery life, worse processor, worse camera. Because there is less space in the device (and manufacturers think that people will buy a slightly thicker phone) and the screen doesn't use that much energy, the battery has to be smaller impacting performance. And users do not accept that. So unless someone discovers that you can make a full feature, big battery phone by increasing depth and weight of the small device, it wont happen / be popular. But once one company makes one, other will probably follow. Which again reduces revenue per producer...