> most of the people I know want to have regular sized phones (~5-5,5") but now... it's easier to smack ~7" screen to the roof-tile (that they call "phone") and sell at a premium...
This has to do with the power they're trying to cram into the phones. We've pretty much gotten transistors as small as we can, but manufacturers still need to sell new phones and the way they've done that for years is increase compute and camera power.
AFAIR the CPU/APU size is quite small. What takes quite a lot of space is battery. And because things are less and less optimize we need more computing power which needs more juice. What's more - bigger screens require more power as well.
Why those big phones popular? Because CPU efficiency doesn't sell well but number do, so we have a race: more storage, more ram, more MP camera... and bigger screen. Those are the most visible and easiest to adjust things. And many people associate size with being "better"...
This has to do with the power they're trying to cram into the phones. We've pretty much gotten transistors as small as we can, but manufacturers still need to sell new phones and the way they've done that for years is increase compute and camera power.