When Apple (AAPL) finally bowed to consumer demand and up-sized its smartphone offerings, the iPhone 6 and the iPhone 6 Plus set a new launch weekend record. Consumers snapped up 10 million of the bigger iPhone and the iPhone phablet.
Well, where Apple goes, Google (GOOG) is usually not far behind. So it should be no surprise that news is now trickling out about Google Shamu, a massive phablet set to launch this month under GOOG’s Nexus brand.
The Wall Street Journal’s Alistair Barr and Rolfe Winkler broke the news that the phablet — referred to internally as Google Shamu (after the famous orca whale) — will sport a 5.9-inch display.
That means the Google phablet will dwarf the iPhone 6 Plus (at 5.5-inches) and even top the latest Samsung (SSNLF) Galaxy Note which grew this year to 5.7-inches.
Actually, it’s unfair to point fingers at Google for following Apple in this case. Both companies are late arrivals to a party started by Samsung when it introduced the original Galaxy Note phablet back in 2011. Everyone made fun of the monster mashup between smartphone and tablet with its ridiculously large 5.3-inch display.
They’re not laughing now. Samsung went on to sell millions of Galaxy Notes and it’s now on its fourth generation.
Phablets Critical for Growth
Phablets are big business. In August, IDC released projections that showed just how critical the iPhone 6 Plus and Google Shamu are to the future of Apple and GOOG.
Although they accounted for just 1% of smartphone sales in 2011, phablets (now defined as smartphones with a display of 5.5-inches or greater) are on pace to enjoy nearly 210% growth on the year, compared to under 13% for standard smartphones. They are expected to outsell portable PCs this year and IDC says the devices will easily leapfrog tablet sales in 2015.
IDC says that phablets will “become the new norm,” with long-range predictions that phablets will make up more than 32% of all smartphone sales worldwide by 2018. That’s almost 600 million devices.
While phablet sales have been taking off in North America, the devices are seen by many as critical for emerging markets, which are tapped as the next big growth frontier.
With consumer incomes significantly lower than in Western countries, phablets first gained popularity in these regions because they combined a smartphone and a tablet in a single device. Big and connected, they also allow many households to skip buying a PC as well.
Google has already begun challenging Microsoft’s (MSFT) Nokia in emerging markets with its low-cost Android One smartphones, but now Google Shamu will offer a premium phablet with the pure Android experience.
Google’s largest Nexus phone to date is the Nexus 5, at 5-inches. While phablets began as an an Android phenomena, the company’s Android showcase lineup has been lacking a Google phablet. Anyone who wanted to experience Android in a larger form factor — without jumping to a tablet — was forced to go to a Samsung, LG or Asus version.
That meant losing the “pure” Android experience, having to deal with third-party user interfaces like Samsung’s Touchwiz and being left waiting for new Android updates.
According to the WSJ story, Motorola is manufacturing the Google Shamu, in what could be its final Nexus project before Motorola’s sale to Lenovo (LNVGY) takes effect.
Google Needs to Get In
Going into the holiday season with the Samsung Galaxy Note 4 arriving any day and Apple’s iPhone 6 Plus selling so fast it’s reportedly delayed production of an expected 12.9-inch iPad, GOOG clearly wants a piece of the action.
If previous Nexus devices are any indication, expect Google Shamu to undercut the iPhone 6 Plus and Galaxy Note 4 on price, while offering first-class hardware specs. And it will be running Android L, the latest version of Google’s mobile operating system.
The biggest risk this Google phablet is taking is in its extreme size. At 5.9-inches, Google Shamu is pushing the limits of how big a smartphone can get before consumers balk. Apple opted to make the iPhone 6 Plus a 5.5-inch device, gambling that consumers would prefer the low end of the phablet size scale where single-handed operation is feasible for some and pocketability is still an option.
By choosing to go bigger than everyone else, the 5.9-inch Google Shamu could become the new big screen smartphone champion … or the Google phablet could mark the point where this class of devices “jumps the shark.”
Regardless of its decision on size, GOOG had to act.
Given the direction the smartphone market is headed, Google Shamu wasn’t really a question of if, but when. And if the Wall Street Journal is correct, Google has answered the question.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.