It's the problem of subsitutes that matters in the US: what do rich people who want a small premium iPhone do when they can't get one? They likely don't go to A

It's the problem of subsitutes that matters in the US: what do rich people who want a small premium iPhone do when they can't get one? They likely don't go to Android, there isn't a small phone worth a damn there. They probably buy an iPhone, right? Likely an XS, since that's the smallest of the new phones. Apple isn't losing anything on them. The market you're really talking about them capturing with a small premium phone is "rich people who have multiple devices and want a small phone and when they can't get one they buy an Android phone or make do with an SE". I'd wager that's small in most terms, certainly in Apple terms -- whether you're talking dollars or heads. But what do the top-end Chinese consumers do when Apple doesn't have a phone that appeals to them? They buy one of the other flagships that run WeChat, and Apple loses them. That's big in Apple terms, missed-expectations-warning big.