Apple Inc. (AAPL): Will It Warm to the Idea of a ‘Phablet’?

While it doesn’t seem so, as there is word that Apple Inc. (NASDAQ:AAPL) is working on a smaller iPhone, which goes in the opposite direction of the phablet, and there is not much talk of a larger iPhone or a tablet smaller than the iPad Mini. Does Apple think the phablet will go the way of the netbook? There are several reasons cited as to why the phablet segment will be different, and thus something for Apple to take seriously:

1. Especially in emerging markets (China, Brazil and India), many consumers want one device that can do everything, because that is all many consumers can afford.

2. In established markets, many consumers don’t need phones more than they need bigger screens. Phablets can give them both. Surveys show that consumers spend two hours a day on average using their smartphones, but time spent on actual phone calls may be as small as 10 percent of that time (about 12 minutes a day).

3. In places like Asia, where accessing bandwidth is expensive, having one device that can be used to access cell networks rather than two would be economical.

4. Phablets, while not fitting well in many pockets, are still very portable and would eventually eliminate the need for consumers to carry separate phones and tablets in their purse, bag or briefcase.

With these reasons for expected staying power of the phablet segment, and the expected high-end characteristics of the devices – which would be in line with the production model of Apple Inc. (NASDAQ:AAPL), to be high-margin, high-end, state-of-the-art devices – might just be the catalyst for Cupertino to add yet another option to its smartphone/tablet lines, a device that connects the two.

Could it be a matter of time? Do you think Apple Inc. (NASDAQ:AAPL) will make the jump into phablets? Why or why not? We’d love to get your feedback.

As of 1:45 p.m. ET Wednesday, Apple Inc. (NASDAQ:AAPL) stock was down slightly from its open, trading at $522.40 per share.

DISCLOSURE: I hold no positions in any of the stocks mentioned in this article.

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