Apple needs to move into phablets or lose out to Windows

“Having created the tablet market with the iPad, Apple has been woefully slow into Phablets,” Haydn Shaughnessy reports for Forbes.

“Unless Apple acts quickly the Phablet market will shape up into a two horse race, without iOS,” Shaughnessy reports. “According to a new report from Juniper Research in the UK, the Phablet market is set for very rapid expansion with Nokia alongside Samsung in the lead. In other words, the large screen format would bring about a surprise revival for Windows in a fast growing market.”

“The reality is the fast developing markets like China, which Apple is trying to woo, make far more use of large screen applications like streaming services and games,” Shaughnessy reports. “Research from GlobalWebIndex, shared with me last week, suggests also that there is a strong trend towards device sharing in these markets. In other words the household acquires on[e] of each -tablet, laptop, Phablet.”

Read more in the full article here.

MacDailyNews Take: As we wrote last week:

If the high-end wants larger phones (and if our polling is any indication, the high-end most certainly does), then Apple should already have larger screen iPhones available. This is Tim Cook’s mistake. He’s left money on the table. Fortunately, contracts run out every day. There’s still time to for Apple to offer proper choice to the mid- to high-end customers that Apple actually wants. One size does not fit all.

And, many Chinese customers do not “prefer” to have one device, one device is generally all they can afford. This is the case in many markets around the world. Apple needs to provide choices to quality customers everywhere. The 4-inch iPhone simply isn’t cutting it for far too many people.

If Apple needs iPhones with larger screens – and they do, because in some places, quality customers are still somewhat economically challenged and therefore try to do it all with a phone versus owning an iPhone and an iPad and, in every market, healthy percentages of quality customers simply prefer more screen real estate – then Apple should release iPhones with larger screens ASAP.

Apple is late on this, but there is still time to recover. Release the Kraken, Apple!

Related article:
Analyst: Apple to launch 4.7-inch iPhone 6 in June; larger 5.7-inch iPhone model due this autumn – January 20, 2014


    1. A brief history of people giving Apple advice

      Whoever wrote MDN’s comment is a Hypocrate!
      Yesterday, you publish the above. Today you are busy hypothesizing on how Apple should become more like Samsung. Make up your mind already!
      You keep bleating about Apple leaving money on the table, who’s money? Apple has its own money in safe keeping so I do not see where the validity of your argument is coming from. If the value of the phablet market is great rivaling the iPhone’s market, Apple would have been in it ages ago!
      If Apple are to do as you and the many anal ysts are suggesting, how would you feel if Apple started their own forum in rivalry to yours? How would the many business’ that exist from creating ‘Made for Apple’ exist? How would the App developers exist if Apple insisted on making or owning all the App’s in the same way that Google and Facebook claim ownership of all the information on their servers?
      Apple inc. is doing well enough thank you! They do not need to operate like a walmart or a monopoly in the way that Microsoft used to.
      So I think it is time you dropped your self congratulating signature and acknowledge that if Apple appear to be leaving money on the table, it is not because they need it, but because they realize the value of walking their own path until and as such the path narrows uncomfortably so that it becomes necessary to seek a new one.

      1. Wow I am astounded by that reaction.
        1) Of course Apple is leaving money on the table if the refuse to enter a market they could sell into as much as they do present markets. Evidence suggests they would. If you can’t see the validity I think most people understand the concept completely.
        2) Whats nade for Apple got to do with making more of the products it already makes, that would not affect suppliers other than to give them a bigger and better market for their products.
        3) Walmart Microsoft? Apple does a pretty good job of covering the main areas of the computer market so what the hell are you getting at? Only markets it has no real influence in are ignored.
        3) Apple needs not to act till it sees its own path narrowing i.e. markets declining? Really? I thought Apple always skated to where the pic is going and Phablets look like having a substantial share of it let alone leaving it like they did small iPads for too long to allow competitors to attack its other markets? Isn’t that what has nobbled Microsoft in recent years. You can’t wait till you are struggling to enter new perhaps saturated markets and Apple has always generated new markets of its own. Sadly it nearly missed the small tablet market missed out till recently on variations on the iPhone allowing Samsung to gain leverage and now you think its a good idea to miss the Phablet market too. God save apple if Cook is think like that. The present strategy has been to push and perfect existing product lines (sensible I think while the post SJ era stabilises) rather than create new market products altogether which could backfire so surely covering developing areas of those markets is the least we should expect surely or the snipers will have a field day. As it is Apple looks like it is following rather than leading too often even if that is a big exaggeration.

        1. Actually, I rather suspect Apple had an eye on the small tablet market for some time. What is up for debate is the timing of introduction. You’ll recall that Apple developed the iPad first, then decided that the better course was to release the iPhone first, then the iPad. Apple has been pretty astute on their timing. It doesn’t fall in line with the endless crop of “Apple HAS to do this” crowd, but they don’t run a company, do they?

          A second thing to consider: Apple may leave money “on the table”, but they may also be leaving “a world of hurt” on the table for someone else (Samsung?) to enjoy. Everybody was whining about blue-ray; useful for some, not so much for others. Apparently the vast majority don’t even think about it any more.

          In business, sometimes you are better off taking a small slice and letting someone else take the large downside to a market segment. Kind of like what MDN refers to when talking about marketshare; better to have the 25% that are willing to pay, and pay really well, than the 75% that practically want YOU to pay them.

          I’m not the target demographic for anything larger; I know that. But as a product line, it may come. I don’t care one way or the other as long as Apple makes it a sound business decision. I want my phone to slip in my pocket just as it is, but if others want one to haul around in a backpack, have at it.

  1. “Unless Apple acts quickly the Phablet market will shape up into a two horse race, without iOS,”

    Just like the netbook market was a ten horse race without IOS in it either.

    Sometimes everybody in a race can turn out to be a loser, while the big winner does something altogether more productive instead.

    1. +10 This take is much more insightful than MDN’s.

      As someone who spends A LOT of time in China, I find many of these market assessments laughable. The consumer behavior they describe in no way reflects what I see on the streets, the subways or in the workplaces in there.

      1. Ralph,

        I too spend lots of time in China and Taiwan and laugh at all these arm chair assessments.

        While I spend my time mostly in the heavily industrial areas near the coast, my sampling of the market seems to tell a different tale. Most of the locals I work with have either an iPhone or iPad. I have been to a couple of Apple stores in Shenzhen and Taipei and they were both packed.

        I don’t believe people realize how much money is concentrated in the coastal areas (~ 200 km inland). Instead they pictures the farming areas in the mid and western part of China.

        Apple can leave those areas for their competitors.

        1. Tom,

          I am glad to hear another informed opinion on the subject. When in China, I try to use public transport as much as possible – the subways and trains mostly, but heck I’ve even done buses. I’m always looking around and checking out what the other passengers are using for tech. In my experience – especially in the region around Shanghai – iOS devices are usually 40-50% of what I see; the percentage is higher in corporate settings (an iPhone is a huge status symbol). That number is down a bit from a year ago, but not by a lot. I don’t see many phablets.

          Let me also underscore what you say about wealth in China. Americans – who laughingly believe the US is the center of all things on Earth – have no idea whatsoever what kind of money and power exists in places like Shanghai. Every Apple store I’ve ever visited in China is always packed and they are shoppers, not tourists. iPads and MacBooks are common in corporate offices.

          As for phablets, I don’t think they are a fad, but I do think they skew towards a low-end market that Apple doesn’t need to rush into. The developing world phablet user relies on the device to provide 100% of their computing and communicating needs because they can’t afford anything else. Apple is wise to wait – let these markets grow and stratify a bit so an iOS device can be designed and priced to skim off the cream, and not be dragged into a race for the bottom.

      1. There are certain similarities.

        The netbook was temporarily a hot product that sold well, however it turned out to be an unsatisfactory solution but has not completely disappeared. I think that phablets are also an unsatisfactory solution and will not remain in their present form for much longer.

        1. Well, the comparison makes no sense. The smartphone isn’t going anywhere. The comparison would make more sense if net books were still around in a different size. People are not going to start demanding smaller phones.

        2. Yes but you have to define how the Phablet is such a product considering it is the same as other dominating products indeed the concept that destroyed the Netbook, but just a different size. You may argue over that size but you can’t write them off unless you can specify a new type of product that will do a better job? There Netbook was easy in that regard, it was a deadens but why would the Phablet fail while other versions of the same type of product excel?

  2. To include Microsoft shows just how out of touch he is. MS believes tablets are laptop replacements, not devices that do things laptops could never do. Don’t just look at the new iPad ad, go on line and read who the people are in the ad to understand what a tablet is for. WP8 is not compatible with Win8, Pro or RT. How do you make a phablet when phone and tablet don’t work with each other? Blackberry is still outselling WP8. How can anyone think company who can’t sell phones or tablets could sell phablets?

  3. I want an Apple Phablet!!! That being said I don’t think Apple needs a phablet. They need a larger phone (4.94″?) but probably could whiff on the phablet and have no issues.

  4. Although I realize it might hurt the pride of all you Loyal Apple Apologists commenting here, but it begs to wonder why Apple is the only smartphone manufacturer on the entire planet NOT to offer a phablet. Even the poorest, crappiest little garage-based Android manufacturer can manage to build one and yet a super-wealthy company like Apple offers excuses why it doesn’t. Did Apple really get caught with its pants down when judging the smartphone market? Sure, I’ve heard Tim Cook’s lame excuse about how current smartphone displays didn’t meet Apple’s exacting standards of quality. Everyone else says that’s BS because most phablet users are extremely happy with those displays.

    Look, I’m not judging Apple on its internal decisions but the rest of the world certainly is. Apple is always the target of being a laggard company, always falling behind the entire Android hardware market. I don’t know where this big break-through has come in phablet displays over the last few months now that Apple has decided its ready to follow everyone else. But I tell you LAAs, if Apple decides to charge more for its larger display iPhones there are going to be huge negative repercussions as to why only Apple needs to charge more for having a larger display when no other company charges more. I really think Tim Cook fell asleep in his office while the rest of the smartphone industry was busting their asses trying to sell as many smartphones as possible but hey, Apple never seems concerned about losing market share anyway, so if they lose a few million iPhone sales every quarter only Apple shareholders take the loss and that’s no biggie to Timmy.

    1. “… but it begs to wonder why Apple is the only smartphone manufacturer on the entire planet NOT to offer a phablet”

      The other companies need to offer a Phablet because they don’t have the skills to build thin phones with a decent battery life.

      It’s easier to make a large phone and then try to fool people into buying it than it is to develop chips that draw minuscule power, which enables iPhones to use smaller batteries and fit into such small cases.

      The only 64 bit phone on the market is also one of the smallest. It’s very rare indeed in any market category that the most powerful device is also the smallest, the best selling one and is amongst the most expensive.

      Phablets are just a fad, like the giant ghetto blasters that people used to carry on their shoulders.

    2. Its a simple math issue. Barely 7% of all smartphone market is over 5″. That’s it. All this hoopla for a sliver of the market. It’s not that apple can’t. It’s simply that the other 93% of the market matters far more and Apple isn’t going to get dragged off course.

      The companies you speak of cater to that 7% for good reason: it’s the sole advantage they can offer a very specific market.
      The hassle and added carrying costs of adding another line don’t make sense for Apple.

      Yes, this is basically the NetBook thing again. It’s also the same stupid view that keeps trying to transform iPads into desktop Mac OS X or laptops into iOS.

    3. You Android Apologists are all the same. You have no idea when it comes to inventing phablets.

      Do you have any idea why Android phones became so damn big? It wasn’t to have a screen half way between a phone and a tablet. It was done to have enough battery power to run a phone more than an hour or two.

      You AAs think the phablet is the next big thing when it’s all about huge, removable batteries.

    4. Phablets are ridiculously big unwieldy impractical phones. They are also too small to be a good tablet. What they are is cheap, aimed at the people who can’t afford a phone and a tablet. With that target audience (people who don’t and won’t pay for a high end product), there is no profit margin to be had. Apple isn’t in the low end market. Lots of companies have tried competing in the low end. They come and go. People think they’re getting the same thing that Apple offers when they buy that crap, only to find out that it’s crap, don’t buy their devices a second time, and about 1/2 of them pay the extra few 10s of dollars a month for a really great device, and realize that for the cost of one large pizza a month, they can have the best product there is.

    5. If Apple is losing out by not having a large screen iPhone, then explain why the 5s and 5c each outsold the Galaxy S4 in October.

      Answer: The large screen format is not as important to buyers as analysts and bloggers would have you believe.

    6. Come on you douche bag, you have questions to answer.

      It would seem many here are taking you to task over your clueless rant. Take the time to respond so that we know you aren’t completely full of shit.

      10 single stars already. How’s that working for ya?

    7. Even the poorest, crappiest little garage-based Android manufacturer can manage to build one

      I think you’ve managed to answer your own question: Apple’s going to leave it to the crappiest little garage-based Android manufacturers to make these crappiest of smartphones. No interested. It beats me why anyone’s interested, but then again I’m not into crappiest technology.

  5. What the heck is a “phablet”? Is it more fabulous than a tablet or phone? Ah, it’s a neologism for phone+tablet, a device with a screen too small to satisfy tablet functionality, yet too big to slip discreetly into a pocket like a phone.

    1. Why… it’s Faaabulous, Daahling.

      Im still convinced that a group of “marketing” specialists decided that phoblet (PHOne + taBLET, which is really is THE reasonable reduction) sounded too much like faux-blet (of false tablet) so they came up with a “it’s faaaaboulos dahling” name for their Frankensteinian creation.

      Interestingly the development of the phoblet market does closely resembles that of the netbook. People were told they (netbooks) were great so they bought them most found them lacking in basic functionality, difficult to use and discarded them (never to buy another)

      The numbers of phoblet owners now buying regular sized phone (including the iPhone) is a quick tell that the phoblets popularity arc had already hit it’s apex (at 7%).

  6. “There’s no question that Cupertino is going to be late to a party that will be in full swing by the time a large screen iPhone 6 launches.”

    Late to a party, Haydn Shaughnessy? More like a circle jerk with Samsung in the middle and Microsoft running interference.

    Microsoft and Samsung were considerably late to the smartphone market and now the British Juniper expects us to believe Apple will be left out in the cold by Microsoft?

    What are YOU smoking, hayden? On what planet is Microsoft a player in the mobile space? Microsoft actually brought the Kin product to market! Another billion-dollar mistake.

    Samsung? They’re just sloppy thieves who got caught stealing didn’t they?

  7. I have no need for a phablet (or even a phone bigger than my 5s, which is bordering on too big). OTOH, I have no need for a 7-8″ tablet either (and don’t own one). That doesn’t mean there isn’t a market for such a device.

    I *sooooo* remember a lot of people around here claiming there was no need for an 8″ tablet — sanding off fingertips, that kind of stuff — but look how the tune changed one Apple came out with the iPad Mini. If Apple deems it important to release a phablet, I suspect we’ll see the same effect around here.

    All I can say is that if Apple does release a phablet, they’ll *probably* get it right. They don’t have a 100% success rate, but they generally do pretty good (especially if someone else has demonstrated that the market exists).

    As for the 5-7% large phone marketshare? Well, keep in mind that *most* of the “smartphone” marketshare consists of very low-end phones where Apple definitely chooses not to compete. Subtract all of those and that 5-7% becomes a whole lot larger.

    I’m sure Apple will do what Apple feels is the right thing to do. And the fanbois will all fall in line…

    1. And the fanboys will all fall in line…

      You must be a newbie around here. You got THAT wrong! Apple fanatics are well known to be THE most critical and demanding technology customers on the planet. Not kidding! Kicking Apple in the nether region for a terrible blunder is standard around here. Kicking trolls in the nether region for FUDing and bullshit is ALSO standard around here. *KICK*

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