How did anyone get "small" from that? Sounded pretty clear to me. I'm a native English speaker, and do not speak or understand any other languages.

I can sort of see it. Smooth is a bit of a strange word choice. And in context she was trying to say sales were OK but not blockbuster, so small was primed in the listener's head. Especially in a blink and you'll miss it sale call. Of course, reporters should have double checked the recording, but that is understandably difficult to do in the current fast paced tech news landscape.

If you already expect "smooth", it is in fact impossible to hear "small" in that recording. But that doesn't mean it's impossible in general.

Perhaps a case of selective hearing or hearing what was expected/wanted?