Photo: ABI Research
This post is from Business Insider Intelligence, a new research and analysis service that’s currently in beta testing. Check out our free trial offer here.Yesterday, ABI Research released a report about smartphone-tablet hybrids — which the firm calls “phablets” — predicting that 239 million of them would ship by 2016. (See chart.)
The firm defines a hybrid as a device with phone functionality and a touch screen between 4.6 and 5.5 inches. That’s larger than most smartphones, but smaller than the smallest tablets like the Kindle Fire, which has a 7-inch screen.
The canonical example of this kind of device is Samsung’s Galaxy Note.
It was widely panned by reviewers at its release last year — particularly for its included stylus, which seemed like an old-fashioned anachronism since the success of the touch-only iPad. But the device has been a surprise hit, with more than 5 million sold in five months, according to Samsung.
So does the early success of the Note translate to a new market in hybrids? We’re sceptical, and here’s why.
ABI told us that it made several assumptions in its report. We evaluate each one below.
- Between 7 and 10 hybrid devices will be on the market this year. TRUE. This seems reasonable. ABI lists seven that are already on the market, or coming soon: the Samsung Galaxy Note, Samsung Galaxy Nexus, Samsung Galaxy S3, HTC One X, Sony Xperia Ion, LG Optimus 4X HD, and the Huawei Ascend D1.
- Every major phone manufacturer will have a model with a big screen by 2015. IMPOSSIBLE TO JUDGE. This will depend on the market success of the early models. If they flop, handset makers will stop building them.
- Apple will release a smartphone-tablet hybrid in 2013. DOUBTFUL. This is where ABI’s reasoning may break down. rumours from usually reliable sources say that Apple is releasing a small iPad this fall, but that device will have a 7- to 8-inch screen, and will not make phone calls. Apple has also reportedly put out orders for 4-inch screens for its next iPhone. But neither of those are hybrids, and Apple has little reason to put one out: the iPhone and iPad are both smash hits, with sales increasing every quarter every quarter. Many consumers have both devices. Why cannibalise iPad sales with a larger iPhone?
We’d add the following notes as well:
- Apart from the Galaxy Note, past hybrids have flopped.This includes early models from Microsoft partners using the brief-lived Pocket PC for Smartphones platforms and the Dell Streak (which ran Android). This suggests limited demand for a phone that requires two hands to use.
- Microsoft is focusing on a different kind of hybrid. Microsoft is entering the tablet market in a big way in 2012, but the company is explicitly focusing on blending tablets with traditional notebook PCs — not with smartphones. While Windows Phone is moving to the same core technology as Windows 8, the user interface and features of each platform are expected to remain distinct. Microsoft also has a very good business reason not to promote blended devices: it reportedly charges between $30 and $150 for an OEM licence of Windows, versus less than $20 for a licence for Windows Phone. That said, some PC OEMs might experiment by putting Windows 8 or Windows RT (the ARM-based variant of Windows) into a small tablet and adding a telephony stack.
In conclusion, despite the early success of the Galaxy Note, it’s too early to tell whether phone-tablet hybrids will be a real business, and ABI’s predictions of 200 million sold by 2015 should be treated with healthy “show me” scepticism.