iPad cannibalization from large-screen iPhone 6 sales will be insignificant

“In a recent Seeking Alpha article an author argued that the iPhone 6 from Apple, which will have two screen size options (4.7″ and 5.5″), both larger than the current iPhone, will cannibalize iPad sales by as much as 60%,” Kevin Greenhalgh writes for Seeking Alpha. “This conclusion seems badly overblown.”

“My biggest problem with the previous article is that the author argues that 50% of large iPhone 6 sales will result in the loss of an iPad sale. This is very off base,” Greenhalgh writes. “Apple sold 35.3 million iPhones and 15.3 million iPads in the quarter ending in June 2014. In percentages this means it sold 43.3% as many iPads as iPhones. Assuming every consumer who buys an iPad also buys an iPhone (which is not the case), only 43.3% of iPhone sales are eligible to result in the cannibalization of an iPad sale. Therefore it is obviously impossible for 50% of large iPhone sales to result in a cannibalized iPad sale.”

“Besides being mathematically impossible, there also is significant evidence that sales of larger phones do not cannibalize tablet sales,” Greenhalgh writes. “That’s not to say that any cannibalization is impossible. There will be consumers who buy a 5.5″ iPhone and decide they don’t need that 7.9″ iPad mini they would have bought. However I believe this scenario will account for a majority of cannibalized sales. A 4.7″ phone and an 8″ or 10″ tablet offer dramatically different experiences, as do 5.5″ phones and 10″ tablets. The only area I expect the experience to be similar enough to cause any meaningful crossover would be between the 5.5″ iPhone and the 8″ iPad mini.”

Read more in the full article here.


    1. Funny thing about the screen size. When the large screen phones first appeared, some 2-3 years ago, their makers (mostly Samsung) had a very hard time selling them; almost nobody beyond geeks really wanted them. Even today, these sizes (5″ and beyond) are the first to get discounted by the manufacturer. Nonetheless, over time, as Samsung’s only meaningful differentiator was screen size (they obviously couldn’t compete on any other quality), their strategy became pushing large-screen phones (“damn the torpedoes!”), so they extended the offerings across the line, including some quite cheap (sub- $200) devices. We could argue what was the direct reason, but the result is that the large-screen phones are now a not-so-meaningless segment of the market, and because they have become more visible in public than before, iPhone owners (current and future) have become curious about the size.

      While I still believe that the current size of 4s (and even 5/5s) is about as large as majority of people would want to have for a phone (before it becomes an unwieldy brick), I may no longer represent the majority on this forum (or if I do, it isn’t an overwhelming one anymore).

      It seems quite clear that the next generation of iPhones will come in larger size(s). I certainly hope that in their wisdom, Apple decides to offer a latest-model iPhone in a regular size (rather than large), for all of us who are more than happy with the existing size, but would like the new A8/9/10 processors and other new features.

      1. It took a long time for many people to understand the benefits of a smartphone. Its not surprising that it takes time for those that eventually want a large smartphone to recognize the utility of that.

        Large is not for everyone, but there is clear utility in having a larger screen.

      2. The rumor is there will be 4.7 and 5.5. Phones the size of the galaxy note or that massive Asus POS don’t interest me but I’m pretty sure that 90% of the people wanting Apple to keep the 4 inch available with change their mind once the hold a 4.7. It’s not that much bigger in your hand and the screen size is much more usable.

        1. Well, if the pixel count remains the same, that means that the amount of stuff on the screen will remain exactly the same, except that it will be about 15% bigger. This will likely be of benefit to those above 50 years of age (with age-related presbyopia), but if you have a normal eyesight, the screen difference will be meaningless.

          All other things being equal, bigger is usually better (after all, throughout our lives, we all keep buying bigger and bigger TV screens), but with a phone, all other things aren’t necessarily equal. As has been argued very many times, the size of the phone isn’t that critical UNTIL it reaches the point of being too big, too clumsy, too difficult to single-handedly maniuplate.

          It all comes down to this. Until iPhone 6, we didn’t have the ability to evaluate, based on the market response, which is the ideal size for a smartphone. Android market, with all the inherent shortcomings (fragmentation, disparity of hardware quality, etc) didn’t provide uniform and neutral platform to determine size popularity (way too many other variables polluting the data set). Once the bigger iPhone(s) is/are here, we should have a clean source of data to evaluate (presumably, with all models of more-or-less equal features and appropriate pricing).

    2. Its always a courtesy to just speak for yourself, not others! A lot of us want as big of an iPhone as can fit in our pockets. We should all be able to choose the right size for ourselves.

      The screen area for viewing and touch input is the most basic specification of a smart phone. It is not surprising that if people care about different specs of RAM size, processor speed, and Flash storage size, that they care even more about different speed sizes.

      I don’t know why some people find different screen sizes controversial. Virtually everyone I know with an iPhone, and these are not techy people, have expressed an interest in having a larger screen having seen how nice it is to read web pages or any app on larger Android phones. Apple was late to market relative to Android with smaller tablets too. In both cases, the value of iOS kept many of us happily with Apple, but when we get the right screen size for ourselves, we are even happier. (What makes any of this not obvious?)

      1. I believe the prevailing sentiment to be, yes, choice in screen size is welcomed. Contention arises only with the possibility that the current size may not be available with the latest iteration… iPhone 6.

    3. I am remembering a chart showing market share for different screen sizes of phones. The 4″ screen and the 5″ screen were nearly equal with close to 30% each. Apple is just entering a new market, the 5″ screen. This is the market where Samsung is king. I know a few people who prefer an iPhone but the larger screen was even more important. BOOM! Samsung phone profit is going to sink even further as all these people run back to the iPhone.

      As to those wanting the 4″ screen? The iPhone 5 is not going away. If the iPhone 5 continues to perform well against its larger screen brethren then maybe the iPhone 7 will be in three screen sizes.

      1. iPhone 5 went away last September. You are likely referring to 5s.

        And I already have iPhone 5s. When a new iPhone comes out, I’d like to be able to upgrade my 5s, without changing the screen size. Contrary to the popular trend, there are very many people who DON’T want the iPhone to grow in size (just in specs).

        All I’m afraid is Apple doing what they did with iPhone 5: they changed the size without offering latest tech on 3.5″ screens. If you want a 3.5″ iPhone today, your only choice is a 3-year old model (4s). I’d love to replace my 5s with 6, but I’d be sorely disappointed if 6 doesn’t also come in a 4″ version.

  1. I’ve been waiting for a large screen iPhone for a long time. I was a iPhone user for the first three models of the iPhone. I waited in lines for the first two iPhones, but as I got older and my eye sight got worse, I needed a larger screen. I’ll be in line again when the iPhone with the 5.5 inch screen comes out, and I’ll gladly ditch my Android phone for another iPhone.

    The large screen iPhone may not be for everyone, but it will be just what I have been waiting for. For people not wanting the 5.5 inch iPhone, that’s OK you’ll still have the 4.7 inch model.

      1. And neither are you, silverbudgie.
        I’ll almost certainly go for the larger iPhone, because of the screen real-estate offered for reading books, taking and viewing photos, using contour maps for navigation in open country, and street-level mapping for car satnav.
        I have no desire to use some shitty plastic Android or WinPhone device, or even the nicer Sony or Nokia phones, I do desire a larger screen on my device of choice, the iPhone, of which I’ve had three successive models, 3, 4 and 5.

    1. The phone company tied to your iPad and Apple won’t let you do it directly, but there are things like Skype and TextMe that make it possible.

      I asked Suri for the phone number of some business once, and she said ‘you can’t make phone calls from this iPad.’ I didn’t want to make a call. I just wanted the phone number! 🙂

      1. Oh, piss off!
        You do not speak for Apple users.
        You very definitely don’t speak for me.
        I would have bought an iPad Mini, as a more portable device than my main iPad, however, a 5-5.5″ iPhone will be a perfect upgrade for my current iP5, meaning I will only be carrying one device, not two.

  2. Not for me. MY original iPad 3G needs updating bad. A bigger iPhone 6 is not going to stop that. On the road it’s more the iPhone. Relaxing at home, it’s more the iPad.

  3. “The only area I expect the experience to be similar enough to cause any meaningful crossover would be between the 5.5″ iPhone and the 8″ iPad mini.”

    Is this such a bad thing? The ASP on the 5.5″ will probably start around $700 and the ASP on the 7.9″ will probably remain the same at around $400. Which product would you want to sell more of?

  4. “Therefore it is obviously impossible for 50% of large iPhone sales to result in a cannibalized iPad sale.”

    Though I would agree that it would be mathematically impossible IF 100% of iPhone sales are for the new larger iPhone6, that is simply not plausible since the iPhone sales number quoted above includes all iPhone models. If 80% of the sales are iPhone6 and the remaining 20% made up of the 5c and 5s, 50% of iPhone6 sales will easily fit into the 43.3% quoted above.

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