> No one is going to walk away from money that can be made even if the market is smaller.

Unfortunately the tech industry has shown us that isn't true. For example, look at the iPhone mini - I forget the exact sales numbers others have cited, but it sold very well. There is clearly a solid market there, even if it is smaller. But Apple isn't willing to chase it, and nor are the various Android OEMs. The same may well prove true for open hardware.

> Apple isn't willing to chase it

They are, it returns next year as iPhone Fold for $2K.