Big Screens Won’t Help Samsung Steal Smartphone Market from Apple

At more than 5 inches, these roomy screens tiptoe into tablet territory

Big is beautiful. That, at least, seems to be the sentiment some smartphone manufacturers are banking on over the next year. Multiple competitors in the smartphone market are hoping to distinguish themselves with new Google (NASDAQ:GOOG) Android-powered handhelds that are dramatically bigger than the phones of the past, with screens greater than 5-inches. That puts these phones closer in line with some tablets, notebook PCs, and even GPS devices. Up to now, though, content has been king on smartphones. Does size really matter?

There are two biggies hitting the market this year. The first is Samsung‘s (PINK:SSNLF) Galaxy Note, a 5.3-inch-screen Android smartphone that comes with a stylus for precision touchscreen work. This device was heavily marketed during the Super Bowl. The other up-and-comer is LG‘s (PINK:LGEAF) Optimus Vu, a 4G phone compatible with Verizon’s (NYSE:VZ) and AT&T‘s (NYSE:T) LTE networks. The Optimus Vu also sports a 5-inch screen and will run on the latest version of Android, called Ice Cream Sandwich, shortly after it releases in Korea this March.

Both of these phones are going to be stars at the Mobile World Congress conference in Barcelona next week. Whether they will be stars with consumers is another matter entirely. The 5-inch screen size certainly pushes at the boundary of pocket convenience. Dell‘s (NASDAQ:DELL) business-centric Streak tablet had a 5-inch screen, and that device sold so poorly in comparison to competitors like the iPad and even Samsung’s Galaxy Tab, which ranged in size between approximately 7- and 10-inches, that Dell had to halt production of the line in December.

A decent device, but not a game-changer

Then again, big phones have been successful so far. Samsung sold more than 10 million Galaxy S II phones in the third quarter in 2011, when it first released. That device has a 4.5-inch screen, notably bigger than the 3.5-inch screen that typifies most touchscreen smartphones. The Galaxy S II was credited with making Samsung the world’s leading smartphone manufacturer over that same quarter as well.

Past the third quarter, though, Samsung wasn’t able to hold onto that lead. Apple‘s (NASDAQ:AAPL) iPhone 4S absolutely dominated smartphone sales during the holiday quarter, with 37 million iPhones sold over the period. Apple also came out on top as the world’s leading smartphone manufacturer in all of 2011, according to research firm Gartner. Of the 472 million smartphones sold last year, 19% were iPhones. It would appear that consumers are pretty satisfied with the 3.5-inch screen of the iPhone.

That isn’t to say big isn’t beautiful. Rumors suggest that Apple will follow the success of the Galaxy S II when it releases the iPhone 5 later this year. A source within manufacturer Foxconn (PINK:FXCNY) said that the iPhone 5 will have a screen slightly bigger than 4 inches and will have a curved shape, unlike the rigid, rectangular 3.5-inch screen of the iPhone 4S. Even then, though, Apple’s device will be dramatically smaller than Samsung’s and LG’s new beasts. At this point, consumers seem seem content to purchase multiple devices–both tablets and smartphones–to suit their needs. This new, big-screen trend likely won’t be earning any manufacturers significant revenue or market share when all is said and done.

As of this writing, Anthony John Agnello did not own a position in any of the stocks named here. Follow him on Twitter at @ajohnagnello and become a fan of InvestorPlace on Facebook.


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