They were a good indicator for notifications that are missed when you were away from phone.
Their absence encourages you to check your phone more often, which means you’ll unlock it and look at some content more often, which means as revenue for someone.
Being honest I think the opposite of this is more likely true. Seeing a flashing indicator for all the notifications my phone “thinks” are important is going to make me more likely to constantly check my phone. Barring that I check when I want to. And with the new passive display modes I can glance and decide whether to even unlock or not.
I don’t believe the iPhone ever had an LED notification light. The iPhone existed well before the watch did, as well.
It never did, indeed. However, there’s an accessibility function to use the flashlight like an old school LED.
