Is Samsung's latest phablet the answer to falling tablet sales?
The Samsung Mega with 6.3-inch display. If you thought the Mega was big, wait until you see its replacement. (Samsung)
Published Friday, May 30, 2014 12:07PM EDT
(Relaxnews) - The company has just filed documents with the FCC detailing a new phone with a 720p resolution, a quad-core processor and an 8-megapixel back-side camera.
So far, so normal, but things start to get interesting when the display is detailed: the screen is a pocket-bursting, small-bag-requiring 7 inches from corner to corner. In other words, it's a tablet that makes phonecalls.
Samsung has form in this area. Last year it launched the Mega mid-level handset with a huge 6.3-inch display and there's every chance that the new handset, currently seeking approval in the US, is a bigger, better -- but mostly bigger -- 2014 model.
The natural reflex when seeing something like this is to ask "who would want a 7-inch phone?" but, according to new data from IDC, the answer is a host of consumers around the world who only a year ago would have bought a tablet instead.
The research firm has this week lowered its initial forecast for tablet sales for 2014 from 260.9 million devices to 245.4 million and said that one of the reasons for doing so is the continuing growth in demand for phablets and how the devices are attracting buyers who would have gone for a 7-inch tablet.
"Two major issues are causing the tablet market to slow down. First, consumers are keeping their tablets, especially higher-cost models from major vendors, far longer than originally anticipated. And when they do buy a new one they are often passing their existing tablet off to another member of the family," said Tom Mainelli, Program Vice President, Devices & Displays at IDC. "Second, the rise of phablets -- smartphones with 5.5-inch and larger screens -- are causing many people to second-guess tablet purchases as the larger screens on these phones are often adequate for tasks once reserved for tablets."
At the moment, tablet manufacturers are focusing their efforts on the 7-inch device segment; after all, 55% of tablets sold in 3013 fell into this category. However, over the same period, IDC claims that phablet share of the smartphone market also doubled (30 million handsets or 10% of the overall market) and 2014 will see more consumers turning to oversized handsets in favor of smaller tablets.
IDC's figures appear to mesh with those from fellow research and analytics firm Canalys, published earlier this month, which highlight that 34% of all smartphones shipped over the first quarter did so with a display of 5 inches or greater.
Canalys's data shows that 22% of phones shipped had a 5- to 5.4-inch display and 10% a 5.5- to 5.9-inch display, and the final 2% was made up by handsets that are closer to tablets than phones, with screens measuring 6 inches or more form corner to corner.
Although demand for bigger phones is strongest in Asia (43% of 5-inch+ phones are shipped to the continent), a bigger screen is becoming a standard feature on flagship handsets. Nearly half (47%) of handsets that would retail for $500 or more off contract -- so everything from a Samsung Galaxy S5 to a Sony Xperia Z1 -- boast a display measuring 5 inches or more. The remaining 53% of phones in this category are iPhones. And the rumors are that Apple is also getting ready to launch a phone with a bigger screen to address this growing competition.
In terms of the tablet market, IDC believes that this increased competition will result in companies refocusing their attention on bigger devices with 9-to-11-inch displays and on 2-in-1 devices, such as the latest Microsoft Surface Pro 3, that are easier to differentiate when trying to compete with smartphones in terms of performance, features and benefits.
"The shift back toward larger screens will mark a welcome sea change for most vendors as the average selling price for these devices will remain roughly 50 percent higher than the average sub-8-inch device," said Jitesh Ubrani, Research Analyst, Worldwide Quarterly Tablet Tracker. "Microsoft is also expected to benefit from this shift as the share for Windows-based devices is expected to double between now and 2018."