Why We’ll Finally See an Apple ‘iPhablet’

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The late Apple (AAPL) cofounder and CEO Steve Jobs was famously disdainful of small tablets, large smartphones and everything in between. “No tablet can compete with mobility of a smartphone. Pocket size tablets are tweeners.”

Still, despite Jobs’ strong feelings on the subject, small tablets soon overtook bigger models as top-sellers forcing AAPL to follow its competitors with the iPad Mini.

The same scenario seems likely to play out with pocket-sized smartphone/tablet hybrids, or “phablets.” Apple seems all but certain to release two iPhone 6 models later this year, and one of these larger iPhones is expected to be really big.

In other words, we’re likely getting an iPhablet.

Samsung Galaxy Note and the Phablet Market

iPhablet iPhone 6 from AAPL would compete against phablets like Galaxy Note

While super-sized smartphones had been released before (primarily in Asian markets where the bigger device reduced the expense of buying both a smartphone and a tablet), it was Samsung (SSNLF) that went mass market with its Galaxy Note in 2011, officially kicking off the phablet craze.

North American reception to the Galaxy Note was decidedly guarded. This assessment from Gizmodo is actually on the mild side:

“Should You Buy It? Only if you have giant hands, bad eyesight, and watch an imperial crapton of video on your phone.”

Despite critical disdain, the 5.3-inch Galaxy Note was a success, selling 10 million units within a year. The latest Galaxy Note 3 (now at 5.7-inches) hit 10 million in just two months. Upping the ante, the company also put out the Galaxy Mega, a 6.3-inch phablet.

Other smartphone manufacturers from Sony (SNE) to LG are on the “bigger is better” bandwagon, and even Microsoft’s (MSFT) Nokia division has a phablet in the Lumia 1520.

And global phablet shipments just keep rising. Juniper Research pegged them at 20 million in 2013 and expects those numbers to hit 120 million by 2018.

That’s a huge, growing market that simply can’t be ignored.

Just as 7-inch tablets like the Amazon (AMZN) Kindle Fire eventually forced AAPL to react with the iPad Mini, the time has come for an iPhablet to combat the likes of the Galaxy Note 4, which is expected to be released this fall.

What We Think We Know About iPhablet Specs

About the only things that all the rumor sites are able to agree on is that the larger of the two iPhone 6 models will be a 5.5-inch phablet and that this Apple iPhablet will be powered by a new A8 processor. Beyond that, these are the current front-runners for specs:

  • Taller, wider and thinner case with rounded edges similar to the iPod Touch
  • Optical image stabilization for the iPhone 6 camera, possible sensor bump to 10 MP
  • RAM bumped from 1 GB to 2 GB
  • Support for 802.11ac Gigabit Wi-Fi
  • Display resolution at either 389ppi “Ultra Retina” 1920 x 1080 (Full HD); or 510ppi 2272 x 1280 (which would be more expensive and battery-draining but make scaling existing iOS apps easier for developers).

There’s also a possibility the iPhablet’s display could be protected by sapphire glass, the ultra-hard substance that AAPL has been investing heavily in through its partnership with GT Advanced Technologies (GTAT).

Thinking Differently

AAPL hates to be proven wrong. It also hates to be seen as a follower. So expect the iPhablet to take a different approach to the phablet form factor, giving Apple the opportunity to showcase its innovation.

But also expect Apple to have studied consumer reaction to phablets — so instead of rushing to market, it will sweat the details so the super-sized iPhone 6 is the ultimate device in the category.

For example, making the iPhablet slightly smaller than the 5.7-inch, market-leading Galaxy Note 3 will undoubtedly be accompanied by studies showing how 5.5 inches is the maximum size for single-handed use of a mobile device, while the display still is large enough to easily read a report.

In other words, the precise sweet spot between a typical 5-inch Android smartphone (too small for productivity) and a 5.7-inch Android phablet (too big to use with one hand).

This is the approach Apple took when promoting the iPad Mini –a display just nine-tenths of an inch larger than those 7-inch Android tablets everyone was snapping up, but with a 35% larger screen.

Speaking of thinking differently, the iPhablet could well be the subject of the recent report that AAPL has been approaching carriers about boosting the price of the iPhone 6 by $100. There was concern Apple would price the iPhone 6 beyond affordability, but with two models — a bigger iPhone 6 and an iPhablet — it can keep one at the traditional $199 (on contract) and command a premium $299 for the larger device aimed at prosumers.

Bottom Line

So, when will we see this elusive iPhablet? Once again, the rumor mill is chugging on this one, but virtually all sources are pointing to a delayed release; late fall or perhaps even into 2015. Multiple reasons are cited — everything from challenges with the larger display to battery problems.

Whatever the actual reason, it seems like we’ll get a dual-release strategy: the 4.7-inch iPhone 6 some time in August or September, followed by the 5.5-inch iPhablet a few months later.

The iPhablet will be released, though.

Apple dismissed the Galaxy Note and its ilk for years, but the market has spoken and phablets are not only refusing to go away, they’re set to explode in popularity.

Just don’t expect Apple’s version to actually be called the “iPhablet.”

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.

Brad Moon has been writing for InvestorPlace.com since 2012. He also writes about stocks for Kiplinger and has been a senior contributor focusing on consumer technology for Forbes since 2015.


Article printed from InvestorPlace Media, https://investorplace.com/2014/05/iphablet-apple-phablet/.

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