Apple and Microsoft Could Be on the Verge of Copying Samsung

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Samsung (NASDAQOTH: SSNLF  ) is often derided for copying Apple (NASDAQ: AAPL  ) , and it isn't difficult to see why. Early models of its Galaxy smartphones were similar in design to Apple's iPhone, while its recent foray into retail, the Samsung Experience shop, bears a striking similarity to Apple's own stores.

But regardless of its supposed rip-off nature, there's one popular trend Samsung definitely started: the phablet. Samsung's over-sized Galaxy Note was the first smartphone of its kind, and nearly all of its competitors have followed. Well, all except Microsoft (NASDAQ: MSFT  ) and Apple -- but that could soon change.

Samsung's phablets have sold well and inspired imitators
While originally derided as an oddity, Samsung's Galaxy Notes have sold well -- not Apple iPhone well, but still relatively well, especially given their higher price tag. Samsung said back in September that, at that time, the company had sold 38 million Galaxy Notes (first and second generation combined). For comparison, Apple sold 31.2 million iPhones (all models) just last quarter

. Clearly, Samsung's Note isn't a flagship phone in its own right, but it's far from niche.

Many of Samsung's competitors, perhaps seeing its success, have followed: LG with the Optimus G, Sony with the Xperia Z Ultra, and HTC with the One Max. Even BlackBerry now offers a phablet.

A Windows Phone phablet is all but guaranteed
Nokia, soon to be Microsoft's official handset arm, is likely going to announce a phablet in the coming weeks. A recently released image teaser shows what looks like a large Lumia phone, one sporting a screen bigger than the current, 4.5-inch Lumia 1020.Ahead of that probable announcement, Microsoft has updated its Windows Phone operating system to run on devices with screens up to 6 inches.

I wouldn't bet on a Lumia phablet turning Windows Phone around. Microsoft's mobile operating system remains a distant third, far behind both Android and Apple's iOS in terms of worldwide market share. Nevertheless, a phablet can't hurt. There may be a segment of buyers in the market that's so attached to their phablets they'd never consider anything else -- if Microsoft is going to win over these buyers, it's going to need a phablet.

Will Apple finally go big in 2014?
With more than 40% of the US smartphone market, Apple doesn't have Microsoft's problem. Still, a larger iPhone wouldn't hurt.

As with tablets, avoiding the alternative form factor could allow Apple's rivals to carve out a stable niche. Although full-size Android tablets found little success when they went head-to-head with the full-size iPad, cheaper, 7-inch models sold well. Despite Steve Jobs famously deriding the smaller tablet form factor, Apple eventually caved, and released the iPad Mini.

It could do the same with phablets, if recent rumors are to be believed. NPD DisplaySearch, citing reports from Apple's supply chain, said last week it expects Apple to release a 5.7-inch iPhone sometime in 2014. Likewise, Piper Jaffray's Gene Munster also believes an Apple phablet could be coming next year.

Apple's management has been asked about a larger iPhone many times, and though they've never confirmed that one is in the works, they've never explicitly denied it either. CEO Tim Cook, when asked about a bigger iPhone back in April, said that the current phablets trade screen quality for size. But rather than say Apple would never make a larger iPhone, Cook only said the company wouldn't offer one while those "trade-offs exist."

Phablets are here to stay
At this point, it's clear that phablets are much more than a trend. Samsung's Notes have sold millions, and with a third generation out this month, that number should only grow. As Samsung has found success, most of its rivals have followed.

Soon, Apple and Microsoft could join the list of Samsung imitators, offering their own phablets in the near future.

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Read/Post Comments (5) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 17, 2013, at 5:15 PM, zippero wrote:

    My cousin totaled her Benz using a phablet while driving. Those things look good until you try to drive with one. Then, the thrill is gone.

  • Report this Comment On October 17, 2013, at 5:16 PM, zippero wrote:

    For Asia's low-and-middle income subway and bus commuters, phablets are great, but rich people in Asia drive cars where one-handed use is a matter of life and death.

  • Report this Comment On October 17, 2013, at 7:02 PM, ScottAtlanta wrote:

    "similar in design" = rectangle


  • Report this Comment On October 17, 2013, at 7:05 PM, paul94409 wrote:

    For Asia's low-and-middle income subway and bus commuters, phablets are great, and rich people in Asia don't drive cars, they seat in their backseat and enjoy life and death on phablets.

  • Report this Comment On October 18, 2013, at 8:06 AM, jdmeck wrote:

    Stupid move by Apple if they do.

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