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Form factor of a device does not impact its inharent functionality. What matters to the functionality of the device is the power it packs inside - in terms of the procesor, memory, connectivity and extensibility.
That said, form factor plays a role in designing applications and feature availability for the mobile device. An app which works on iPhone SE would also work on iPhone 7 plus. But the iPhone 7 Plus provides so much more screen real estate that a user can be provided with an experience of higher degree.
Mobile applications are all about experience. Every device user has an expectation about this and the experience percieved by the user decides if the app continues to stay installed on his/her device.
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