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BLOG: No, a phablet version will not save the iPhone

Galen Gruman | Feb. 11, 2014
Everyone is telling Apple it needs a big-screen iPhone to rekindle sales -- but a look at the data shows that won't work

Data shows that the bigger Galaxy smartphones aren't outselling the smaller iPhones, though Android outsells iOS three to one for smartphones. There's no doubt a bigger iPhone model will attract some people, but it won't dramatically grow Apple's iPhone sales, just as it hasn't done for Samsung. And big-screen smartphones from other Android smartphone makers have had almost no market impact.

If you want to grow smartphone sales dramatically, you need to have much cheaper models that appeal to the billions of people in poor countries who can'rt afford high-end devices. That's where the growth is — but not the profits, which is a whole other story.

What can Apple do to "save" the iPhone, which means create a huge growth wave to make Wall Street happy? I don't think it can do anything. The smartphone market in developed countries is getting saturated. In the high-end market, Apple is already winning. It can continue to win -- and perhaps win a little more — by continuing to innovate its devices, as it did in the iPhone 5s with its Touch ID sensor lock and M8 motion coprocessor. Bigger screens will help a little. But that's defending the turf it already has, not growing in new ways.

Which brings me to the iPod: A decade ago, the iPod was the hot product, quickly taking over the MP3 player market. Once it saturated that market, Apple came up with the new models in various shapes and sizes, but sales began to crumble. For a while, its iPod Touch gave the iPod a market boost, providing an iPhone set of training wheels for kids and a neat gaming device to boot. But 7-inch tablets like the iPad Mini and Google Nexus 7 now own that market. iPod sales dropped in half last year and had slowed well before 2013.

For Apple, the big growth potential is now in the iPad, not the iPhone. At some point, a product will need to come along to supplant the iPad when that hits saturation. It's how the world works — it's happening to Samsung, too, which is finding that its own tablets (especially its smaller models) are becoming stronger profit engines than its smartphones.

Forget about saving the iPhone -- it's not dying. But it is hitting middle age, and as such it will have to work harder to maintain its good health.

Source: InfoWorld


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