Except that Samsung has historically had a problem of releasing terrible non-flagship devices. Every Samsung generation has 9000 SKUs, and a decent proportion of those are low-end garbage that sabotages their brand. Consumers have figured out that the flagship devices are good, but once you start throwing suffixes around they get suspicious.
I'd wager that shoppers who would like a smaller phone would still by the latest giant Samsung flagship phone over the Alpha because of this effect.
Samsung are positioning the Alpha very much as a flagship device and pricing it in the same region as the S and Note devices.
The plan seems to have the S series for people who want the very cutting edge in specs, The Alpha series for people who want a compact high end phone with sleek design and the Note series for people who want a phablet styled device. Three different devices for three different audiences, but all are flagship devices in their respective segments.
I'd wager that shoppers who would like a smaller phone would still by the latest giant Samsung flagship phone over the Alpha because of this effect.