The iphone air isn’t popular either and yet here we are. They preferred releasing a huge thin phone than a tiny thin phone. Even if the % of clients is small, there are still millions of potential mini clients
Apple is very good at market research and understanding users… but not perfect. I think they genuinely believed the Air would sell a lot more than it did.
And “millions” is not necessarily a lot. Apple sells 250 million phones a year. A SKU that sells 3 million is a distraction with much lower ROI against R&D than a mainline phone. It takes just as much engineering to create and as much manufacturing to produce, so fixed costs are spread among many fewer units.