In the end, phablets can be a great solution when it comes to integrating many different devices into one, and that´s probably the main reason for their success in emerging markets. The way things are going, it seems that this big smartphones have plenty of room for growth over the next years.
The case for an Apple Phablet
A phablet would have many advantages for Apple Inc. (NASDAQ:AAPL), especially when it comes to emerging markets expansion. Competition in those countries has been a big issue over the last quarters, with many Android products – especially from Samsung – gaining market share versus the Cupertino giant.
Google Inc (NASDAQ:GOOG) has been remarkably smart in allowing different device manufacturers to use Android freely at no cost. This means that all kinds of smartphones, tablets and phablets are available with different sizes and specifications, and consumers can choose their best fit knowing that the product will have the support of a deep ecosystem with all the necessary applications.
This is a platform competition, not only a matter of devices. Many customers choose their products based on IOS or Android preferences. Google has made it possible for the Android platform to be available at different sizes, prices and quality levels, so Apple Inc. (NASDAQ:AAPL) needs to start closing that gap if it wants to increase its chances in emerging markets.
This product could actually help Apple Inc. (NASDAQ:AAPL) when it comes to working around its pricing problem in emerging markets too. The iPhone may be too expensive for many consumers in the region considering that it´s only a smartphone, but if you are buying a single device which satisfies your different phone and computing needs, that price may become much more reasonable.
A phablet would fit quite well into Apple´s current line of products, between the iPhone 5 and the iPad Mini, and it would allow the company to position itself better in emerging markets. In the same way the company has launched a wide variety of iPods with different sizes and specifications over the years, there is no reason to believe that it won´t do the same with the iPad and the iPhone.
Is It Coming?
Tim Cook has officially denied any possibility of a bigger iPhone coming from Apple Inc. (NASDAQ:AAPL) in the middle term, during the company´s latest earnings report he said:
The iPhone 5 offers a new 4-inch retina display, which is the most advanced display in the industry. No one comes close. It also provides a larger screen size without sacrificing the one-handed ease of use. We put a lot of thinking into screen size and believe we’ve picked the right one.
But we know how these things work, a company like Apple needs to deny any rumor until it becomes an official launch. Apple refuted versions of a smaller iPad on several occasions, even down playing those kinds of products. As it turned out, the iPad Mini is a big success for the company, so these kinds of comments from management should not be taken very seriously.
Analyst Brian White from Topeka Capital Markets has forecasted both bigger and smaller iPhones to be launched this year based on his channel checks. I think there is a really good case for a smaller iPhone too, and it doesn´t contradict the phablet thesis. The main point is to provide different alternatives and allow customers to choose the one that best fits their needs.
