The entire Mac line is a teeny tiny slice of revenue compared to iPhone. Allowing OSX on iPhone would increase the utility of iPhone, leading to more sales.
> Allowing OSX on iPhone would increase the utility of iPhone, leading to more sales
That assumption is not necessarily true.
What this implies is that there is a market of existing consumers that would not buy an iPhone because it lacks OSX support.
The iPhone portion of Apple's business generates around $144B in YoY revenue in Q1FY27 [0].
Whenever an organization contemplates building a net new capability like the one you mentioned, a quick test is whether it would be able to generate and sustain at minimum the equivalent of 1% of yearly revenue.
If this was a $1B revenue opportunity it would have been implemented, but it's not.
Nor is it a feature that can actively or dramatically increase Apple's market share in most markets.
A good proxy of such demand would have been a sudden increase in iOS users using USB-C screen share and a Bluetooth keyboard to interface with an iPhone in a desktop form factor (something which has been enabled since iOS 15), but such an increase has not happened.
Consumers haven't been told they can do that though. It's not ergonomic to do that. There's not a Belkin plastic dock to support that use case, so I don't find that is a good proxy for it.