“Apple still dominates in higher-margin consumer electronics, and its recent move to a 5.5-inch phablet should be gross margin neutral even after cannibalizing demand for the smaller iPad Mini,” Alex Cho writes for Seeking Alpha. “‘Apple will likely charge a $100 premium for the 5.5-inch version that media reports have suggested will be available a few months after the 4.7-inch version,’ Raymond James analyst, Tavis McCourt stated in a note.”
“The iPhone 5.5-inch version may slow the penetration of the iPad Mini. Phablet devices like the Galaxy Note 3 are sold for $700 (off contract). The incremental cost of a larger screen is low, and is covered by the higher retail price. When comparing the bill of materials for the Samsung Galaxy Note 3, and the Samsung Galaxy S4 (similar generational components), the differential is a whopping four dollars,” Cho writes. “What this indicates is that the iPhone 6 5.5-inch variation’s $100 price differential from the iPhone 6 4.7-inch variation will almost be pure profit. So even if customers decide not to buy a low-end iPad tablet, the company is able to make up for the cannibalization with a device that commands a much higher premium without hardly any incremental cost.”
“The low-end iPad Mini has an estimated bill of materials of $200, when you go with the model that has a Retina display, it’s estimated that costs would go up by 30% from the base model, indicating that the bill of material depending on the Mini model would be $200-$260,” Cho writes. “If that’s the case, even if the iPhone 6 5.5-inch version were to completely displace the demand for the iPad Mini, the impact is net income neutral. Furthermore, just because a consumer buys the larger 5.5-inch display device, doesn’t mean that the same consumer will not buy a tablet. In fact, it may encourage consumers to buy the larger tablet (iPad Air), therefore I believe that Apple’s upcoming product mix will have a positive impact on net income, and phablet cannibalization will positively impact gross margins.”
Read more in the full article here.
Brilliant. You’re still talking about a big-ass phone and no one can use or hold without looking ridiculous. Just call it an iPad nano and move on.
In your mind maybe. In real life they are fine to hold, use one handed, fit in the pocket and look no more stupid than squinting at videos on a small screen. It’s another myth that once Apple (at last) release a decent sized phone and if it’s designed properly will disappear.
Some owners of small smartphones seem to be like owners of small penises when they insist that size does not matter.
I myself find myself using my iPad Air far more than my phone precisely due to the smaller screen and inferior audio. Likewise, I prefer my Mac Pro and LED Cinema display to anything handheld.
So don’t buy it. You’re opinion isn’t gospel.
Yeah, well, you might look ridiculous…
As I rarely make phone calls, but have other uses for the device, like navigation, reading, photography, etc., the larger iPhone is absolutely perfect.
And I can always use a headset to make calls, which obviously hasn’t occurred to M…
“As I rarely make phone calls, but have other uses for the device, like navigation, reading, photography, etc., the larger iPhone is absolutely perfect.”
Then don’t call it an iPhone!! Like I said, call it an iPad nano and move on.. Marketing this as a phone is a joke.
There’s nothing wrong with a 5.5 inch smartphone as long as you maximize its potential. I own an 5.5in HD andoid generic phone and use this for browsing (through wif), messaging (yahoo messenger), voice-ip by Tango, as gps navigation tracker using Openstreetmap in offline mode, and the occasional NFS racing app,. There are iOs versions of these apps so, really owning a phone this size has more upside, down downside. Battery life sucks though, because of its quadcore CPU. But. having an iPhone this size, with improved A8 CPU and better power management for longer battery life will be a godsend, and I will buy this iPhone in a heartbeat. once it is available.
Two days ago, I saw someone at the gym with one of those ginormous phones actually strapped to her upper arm in an arm band. She was a young lady, about 5′ 7″, and the phone was so large it covered the span of her humerus and of course bulged out like a shield. It had to have inhibited her range of motion, but she was doing leg exercises, so I suppose she didn’t care.
For some sports one of the downsides of the larger phones is when u wear it on your arm. For running it is possible but far from perfect, weight training more so. However for biking it makes a great bike computer. In the gym I do take my bigger phone but do not wear it. It’s great for showing videos of correct form and recording your weight sessions especially if the machines have NFC and graphically showing your running and cycling stats too.
How many phone calls in relation to other forms of communication do you really make on these slabs of tech?
To be honest I rarely use my phone held up to my head- more often making calls through bluetooth in the car or via TruPhone on my iPad Air or on my Mac. Your mileage may vary.