Except that a 12" Macbook was NOT an entry level laptop. It was a premium laptop over the Air.
A smaller laptop is not automatically entry level. In the case of 12", Apple had to engineer some workarounds and used more expensive components to get to a smaller size.
What they can actually do to own the entire entry level market is to release a Macbook SE using the M1 Air chassis but with an M2/M4 and sell it for $750 MSRP permanently.
I think the 12" Macbook would be like the iPhone Mini. A vocal minority kept saying they want it. Apple built it and no one bought it. Granted, I bought one myself and love it. But clearly it's a small market and not worth the effort.
Well, the bolded statement isn't really a perfect analogy. You yourself said the 12" MacBook was expensive, whereas the iPhone SE was the budget model. It was not sold as an entry level laptop. Overall, the problems with the 2015-2017 MacBooks were:
1. It was expensive.
2. It had only one USB-C port, which didn't even support Thunderbolt, and which often was occupied by a charger.
3. It was slow.
4. It had a crappy keyboard.
5. The trackpad wasn't the best either.
While I do agree with you that a
new Apple Silicon 12" MacBook would also sell kinda poorly like the iPhone SE, I think it would do significantly better if:
1. It costs less than the 13.6" MacBook Air.
2. It has two Thunderbolt ports, or at least one Thunderbolt port and one charging port.
3. It runs M2, so it's fast.
4. It has a good keyboard.
5. It has a good trackpad.
However, as previously mentioned, I'm out of this market now as I use the iPad Pro M4 more. That is a bit pricey, but I was willing to pay the premium to get the (tandem) OLED. It should be noted though that it has one Thunderbolt port and one charging port (on the Magic Keyboard), it has M4 which has the fastest single-core speed in a mobile CPU in the world, it has an excellent keyboard (albeit small in the 11"), and it has an excellent trackpad (albeit small in the 11").