They want to differentiate themselves as much as possible from smartphones to survive. As smartphones have continued to get better (first via optics, then via

They want to differentiate themselves as much as possible from smartphones to survive. As smartphones have continued to get better (first via optics, then via software/computational processing) it has been the physics that has kept full frame (and medium format) relevant. Personally I was a huge fan of m4/3 for the lower weight/smaller/open format interchangeable lens system but one cannot deny the cross-over between it and smartphones is perhaps too close to survive (Olympus is already out). APS-C isn't as bad as m4/3, but why invest tons of resources/time into a format that can also get swallowed by the megafauna that is smartphones (via e.g. periscope lenses)? Instead, they can offer consumer grade/entry level FF cameras, with no lens system dilution or headaches trying to implement an inter-compatible flange focal distance (between APS-C/FF).