Yes, Apple Knows the iPhone 6 Needs a Bigger Screen


The current iPhone 5s measures four inches diagonally. But that could change very soon. Source: Apple.

Apple's (NASDAQ: AAPL  ) investors and consumers have been looking for a bigger iPhone for a while now. Samsung dominates the large-phone category and offers a wide variety of device sizes, but Apple has been conservative, increasing its phone to just four inches when it launched the iPhone 5 last year.

But recent documents shared in a trial between Apple and Samsung show Apple knows how important a larger iPhone 6 could be in light of the competition.

"Consumers want what we don't have"
In slides obtained by Re/code, Apple showed fiscal 2014 data that points to an overall trend toward bigger phones, as well as devices that cost less than $300. A very blunt slide labeled "Consumers want what we don't have" showed that smartphone buyers are looking for devices with screens that are larger than four inches, and that the majority of growth was happening with devices cheaper than $300.


Smartphone growth is trending away from the iPhone's price and size. Source: Scribd via Re/code.

Further slides show that Apple, not surprisingly, knows consumers are looking for smartphones that are bigger and less expensive than its iPhone.


Apple knows consumers are looking for something more. Source: Scribd via Re/code.

While it's unusual to see Apple so honest about where it stands among the competition, the slides aren't all that revealing. Data from International Data Corporation shows the smartphone market grew by 38% in 2013, but Apple's growth was just 13%. But now we have actual confirmation that Apple knows what many consumers already know: The iPhone is expensive and it has a smaller screen than a lot of other devices.

Great. Now what?
Getting a glimpse into Apple's mind is good, but how does this help investors? For one, it means Apple no longer has an excuse not to release a larger screen for the iPhone 6. In fact, now that we all officially know a little insight into Apple's knowledge of consumer preferences, it would be pretty irresponsible for them not release a larger device. 

I'm trying to imagine the iPhone 6 debuting this fall and Apple revealing a brand-new high-end spec device with a four-inch screen, and then everyone's jaw drops because the device has a been-there-done-that feel to it. With all the articles surrounding a larger screen size, or two, and now these documents surfacing I can't see how the current screen size could possibly stick around for the iPhone 6.

OK, so let's (safely?) assume the iPhone 6 has a bigger screen and is released in early fall of this year. Brian Marshall, an analyst at ISI Group, thinks there's a lot of large-screen iPhone demand pent up among consumers, and I agree. Marshall said in an investor note, acquired by Apple Insider, that the demand could translate into a 14% upgrade rate for the iPhone 6, among current iPhone users. According to his calculations, typical upgrade percentages among iPhone users are about 9% in an average quarter.

Whether Marshall's predictions prove true, I still think the pent-up demand theory is very plausible. Loyal iPhone users, of which there are many, will likely be offered the largest iPhone to date some time this year, and for many it'll be a hard offer to pass up.

"One more thing" Apple needs this year
Aside from a new and bigger iPhone 6, Apple investors are likely hoping the company enters the burgeoning wearable tech market this year. Apple hasn't announced anything yet, but Google recently introduced a new OS specifically for wearables called Android Wear. Investors don't need to wait for Apple to get on board with wearables, though. Click here to get the full story on this growing tech trend right now.


Read/Post Comments (25) | Recommend This Article (12)

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 April 08, 2014, at 10:06 AM, jdmeck wrote:

    No it does not. The type of customer who wants a larger screen is not the customer Apple should be targeting.

  • Report this Comment On April 08, 2014, at 11:37 AM, bachnut wrote:

    Why would I want a phone I can't put in my pocket? The whole purpose for me is to not miss important phone calls, messages, emails, and GPS. Otherwise, there's devices like iPads, MacBooks, iMacs, Minis, and Mac Pros. It's that form and function thingy.

  • Report this Comment On April 08, 2014, at 12:09 PM, randallw wrote:

    I am waiting for a larger screen to upgrade from my iPhone 3S. However, there does need to be balance. My girlfriend constantly asks me to hold her ridiculously-large Samsung Galaxy 4S because it does not fit in her pocket. My response, of course, is always "no" :)

  • Report this Comment On April 08, 2014, at 12:47 PM, TMFAeassa wrote:

    Nice article!

  • Report this Comment On April 08, 2014, at 5:08 PM, Nixic wrote:

    Trust me, you'll never go back to that miniature screen again after owning a Note 3. I openly laugh every time I hold an Iphone. If they want any kind of competitive edge, the first step is going to be matching the Note 3 screen size and furthermore it's tech.

  • Report this Comment On April 08, 2014, at 5:09 PM, Nixic wrote:

    By the way, I have tiny jeans and it fits perfect in every pocket. Albeit, I always forgo cases since the point is to have a slim phone.

  • Report this Comment On April 08, 2014, at 5:18 PM, pacoguerilla wrote:

    Big like what ?

    A Pizz' to place a call, stup' !

    Paco

  • Report this Comment On April 08, 2014, at 5:34 PM, chocteach54 wrote:

    Denying reality will not change it. Apple should have done this a year ago when they came out with the 5. I jumped over to a Android phone 2 years ago strictly because I could not see the darned I Phone screen any longer. After having a 5 inch screen there is little motivation (other than a single operating system) to return to a 4 inch screen. Phones are now computers and when you are using a device to send/receive mail, message etc. the size of the screen will increasingly matter. So Apple, get the screen size issue fixed and watch your sales recover!

  • Report this Comment On April 08, 2014, at 5:36 PM, MikeinDenver wrote:

    If you can't fit newer 4.5" or greater phones in your pocket you are either a girl or wearing pants with pockets way too small. Frankly the iPhone screen has always been laughably behind the rest of the market. I would rather have a phone that is good enough to work off instead of having a phone and a tablet to do the job one Android device can do.

  • Report this Comment On April 08, 2014, at 6:21 PM, mergerman wrote:

    It seems to me that the baby boomers are having eye problems that make bi-focals difficult to use in reading. I don't know the best size of smart phone, but would love to have blue tooth phone in my iPad. Putting my iphone in my pocket has always been awkward unless I'm standing up.

  • Report this Comment On April 08, 2014, at 7:06 PM, cmalek wrote:

    @MikeinDenver:

    Heck, I can fit a laptop in my BDU pockets but that does not mean that I want a phone of that size. Besides, fatigues clash with my lady's evening dress when we go out on the town.

  • Report this Comment On April 08, 2014, at 7:11 PM, PMTP wrote:

    Apple is right that sometimes customers don't know what they want. However, sometimes they do know what they want and many (myself included) want a bigger screen. It is good that it seems highly likely the next iPhone will have a larger screen. I won't buy one until they get bigger (at least 4.5 inches and probably not much more than 5 inches). If they fail to listen to customers that have been screaming this long, I will sell my Apple stock the moment I find out they didn't increase the screen size for the next phone. Luckily, I think the chances of that happening are small.

  • Report this Comment On April 08, 2014, at 7:16 PM, plantoretire1day wrote:

    The IPhone users I know seem to be very loyal, especially if they feel they have the latest and the greatest.

    I personally would like something that serves as a smart phone and a mini tablet without having to put something like a notebook to my ear to say "hello". I've seen it. It was not pretty. :-)

    For a conservative spender such as myself, the price for these 'necessities' is way more than I want to spend. Even if you don't spend a fortune upfront in the phone purchase, the plans are either very expensive or are too many choices to sort through. Perhaps plans are better now. I'll keep my nonsmart, $40 a month phone for now. I'm the untapped market. :-)

  • Report this Comment On April 08, 2014, at 7:17 PM, SuntanIronMan wrote:

    @MikeinDenver

    So instead of "You're holding it wrong.", it's now "You're wearing your pants wrong." Haha.

  • Report this Comment On April 08, 2014, at 7:29 PM, gr8twhtebuffalo wrote:

    I switched to the Galaxy S4 after having my iphone 4 for two years.

    Most loyal iphone users will say they don't need a larger screen but they're just in denial. Any negative feelings I had about how the phone fit in my pocket were gone after one month.

    Iphone loyalists won't admit it but the Galaxy S4 along with all the other smart phones that have larger screens AND much better cameras are just more fun. Apple needs to catch up.

  • Report this Comment On April 08, 2014, at 7:32 PM, gr8twhtebuffalo wrote:

    iPhone users are mostly in denial. I switched from using an iphone for three years to the Galaxy S4.....and any negative feelings I had about the phone being too big were gone in a month.

    Most iPhone loyalists simply don't want to admit that other phones with larger screens and better cameras are more fun....Apple needs to catch up to the times.

  • Report this Comment On April 08, 2014, at 7:36 PM, johnsonle9 wrote:

    Apple is behind the curve on screen size and should offer wireless charging, it amazes me they still hold the market share they do with what they are offering. Apple fan boys will move in mass if something is not done in short order. The OS is also outdated, I can see Apple is avoiding any customer confusion by keeping the OS non-customizable, but this is the other thing that keeps me from going with an iPhone. Size, wireless charging and OS customization update to the OS then I'll consider one.

  • Report this Comment On April 08, 2014, at 7:39 PM, johnsonle9 wrote:

    I see the iPhone as a phone and the larger screen Android phones as a multipurpose tool. Let face it the phone is the last thing a lot of people are doing with it. Apples management needs help.

  • Report this Comment On April 08, 2014, at 8:11 PM, awallejr wrote:

    I used to want a bigger screen but since I got an ipad I only use the Iphone as a phone.

  • Report this Comment On April 08, 2014, at 8:31 PM, bordereiver wrote:

    I still love my 4S iphone, but my wife gave me her Samsung Note 3. So she could get a better Samsung phone. It is nice to have a bigger screen but I, like others above, like carrying my iphone in my pocket. So for now have both. bordereiver.

  • Report this Comment On April 09, 2014, at 2:00 AM, DrRobin wrote:

    Just this past February I purchased a new Elephone P8 Android 4.2 Smartphone MTK6592 Octa Core 1.7GHz 5.7 Inch FHD Screen 2GB ROM 16GB RAM OTG Dual Camera's 16mp and 8mp so much more, cost 256. usd with the special case, what a phone and now I've had it for more than a month and it is a great phone with the latest processor and memory. Both the cameras and the video are excellent as well.

    My wife on the other hand has an I-phone 5, I bought her a year ago and she loves it because she is a woman and it cost more.

    But dollar for dollar I'll buy another elephone updated version as technology improves, But I did buy it from a company in Shenzen (a great little southern city if you ever get the chance), and had it shipped to me from Buy 1. com

  • Report this Comment On April 09, 2014, at 8:24 AM, ziq wrote:

    But what if you want a phone you can actually carry around in your pocket and use as a portable phone? Hello!

    I guess with other phones making them bigger solves the problem of butt dialing or taking butt pictures. Never a problem with iPhones. Not a fanboy, just saying.

  • Report this Comment On April 09, 2014, at 9:13 AM, KombatKarl wrote:

    Apple is a joke. When the 5 was announced with 4G and a 4" screen I was like "Is this 2010?" No, it was 2012. Innovative? Hardly. I don't think the iPhone needs to get as big as the Note, but 4.5" is a minimum. Their stubbornness over these things for no particular obvious reason is one of the reasons I have hated Apple since the late 90's.

  • Report this Comment On April 09, 2014, at 2:15 PM, MastaShzl wrote:

    There is nothing wrong with a screen between 4 - 5 inches. 4.5 inches can fit in anyones pocket, unless your wearing really tight pants

  • Report this Comment On May 10, 2014, at 10:29 PM, DukeMontrose wrote:

    With the deepest respect, some of the text this fool sees here somewhat condescending. Apple is per chance the premier icon for America's tech superiority world wide. AAPL knows its business.

    Two very recent additions of eminences in the music + retail arena appears to confirm their determination to dominate the phone business.

    Please note the phone IS the best/most convenient + widely accepted device for communication. Apple methinks is working all kind of magic to make that device even more useful.

    It has accelerated the intro of their latest phone version for August. It was never interested to sell the most number but sell the most with a high profit margin.

    I detected signs of distress in their Asian rival Samsung. It has slowed down deliveries of parts from one of us fool's rule-breakers, many fools have invested in.

    With all above, I'm puzzled that AAPL has a somewhat lower PER than the blue chips in the Dow. Compare that with AMZN's crazy 450+ . Unlike AAPL, it has not found the formula for making any meaningful profits. Not on any professional or ethical grounds is such a valuation defensible.

    Like all such past fads/bubbles, it shall not last.

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