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As many of you already know we are on the brink of a new class of mobile devices the phone – tablet combination dubbed “Phablets”. Over the last few months the Samsung Galaxy Note has received a much warmer welcome by consumers than analysts. Many of the industry analysts didn’t know what to do with this device. For many, the device was seen as too big for a smartphone and too small for a tablet; the outlook for this device did not look very rosy. But consumers thought otherwise. By the end of March Samsung announced that worldwide shipments had reached 5M units or about 1M per month. This would put Samsung on a path to ship over 10M phablets in 2012.
That’s certainly noticeable but by no means earth shattering when we take into account the amount of tablets and Smartphones being shipped this year. As we pointed out in an earlier article, the form factor does not making it a logical choice for people as a smartphone or a tablet replacement. It could be an in between device for people who do not want to buy two devices, or they may prefer to own a tablet that is paid for on a subscription-based plan rather than outright buying the device. All these ideas evolve around smaller groups of consumers and fit well within a sales number of 10M units per year.
To understand where this argument is coming from, take a look at the attached graph. Here we show you the display size distribution of all tablets being released. The source of this data is our own database and we may have missed some units released on a regional basis. Nevertheless, the picture is pretty clear. There are 7- and 10-inch tablets and nothing else. Indeed not a very good indication for the potential success of phablets.
Today phablets include a phone, something the Dell Streak 5 was missing. Maybe if it had, the Dell Streak story would have been different, but this is water under the bridge.
Latching on to the Galaxy Note success are several new devices from HTC, LG and Sony being released later this year. In addition, Samsung is releasing the S3 this month, falling into the same category. On the same token, Apple is working on their next generation iPhone, which is reportedly offering a larger display as well (rumors are around 4-inch diagonal).
This shows one of the issues with the phablet forecast. What qualifies as a pahblet and what does not? There will be an arbitrary display size definition and analysts will argue over what the right number is. This requires everyone to be careful and read the fine print when comparing forecast numbers.
The first real data point thrown into the ring is from ABI Research who has released a forecast figure for phablets. While still slow in 2011 (there were only a few months of sales for one device) they predict that this device type will reach 208M units per year by 2015. This number is slightly under the forecast for the total tablet market in that year. If you want to read the complete press release you can find it here http://www.abiresearch.com. According to the ABI Research definition a phablet has a touchscreen with diagonal between 4.6- and 5.5-inches.
This forecast will of course force the hand of other research firms and we will issue forecasts in the news going forward. My issue with this market distinction is the narrow size definition. For me a tablet is tablet if it has a touchscreen (no hard keyboard like on laptop computers) and no phone radio (like all smartphones have). This definition is clear cut and easy to understand. It does run into a problem on how to account for VoIP services turning these devices into phone-like devices, however.
I guest there is no clear cut way of definition. If you have one let me know.