Can you explain what you mean? Are you saying you think the size of the display is a primary cost center for phones, so small screen phones would have a substantially cheaper bill of materials?
Not exactly. The way this phone is being marketed is very strange - this phone is designed as an "add-on phone", it can only be used as an add-on to an existing line.
As a standalone phone $350 isn't too bad, but asking people to pay $350 in addition to whatever they want to pay for their "main" phone is a little much.
They're in Apple Watch territory with this pricing and I don't think they have the ecosystem to demand that kind of price.
That little "Palm" phone only has an 800mAh battery. Smaller display and GPU would help conserve battery but not enough -- it won't last long between charges.
Which is too bad as I really like small phones.