> If I want to buy a new MP3 player, I have to buy something from a company I've never heard of with a terrible screen, use an old phone, or buy some sort of enthusiast audiophile flac player thing that costs way too much.
Is this surprising?
They are a commodity (you can literally build a fairly decent for less than $10 in parts) so therefore are low profit. Brands you have heard of generally don't want to play in commodity markets.
The alternative is to move upmarket where prestige or specific features are important:
> some sort of enthusiast audiophile flac player thing that costs way too much.
There you go.
> Why can't somebody take simple smartphone hardware and make a modern media player that is not a phone?
They can and do. Look on Amazon.
They call into the two buckets you outline above. Just buy one of the $50 ones from the companies you haven't heard of.