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There’s no denying the introduction of the new iPhones has been a success, but the undisputed king of smartphones, and phablets, still holds the trump card.
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What a weekend it was for Apple (AAPL +0.01%) and iFans everywhere. There was, and still is, a lot riding on the successful launch of the newly released iPhone 6 and iPhone 6 Plus. Leading up to the big introduction, Apple's stock price finally began to gain some momentum, and based on CEO Tim Cook's announcement that a whopping 10 million units were sold the first weekend, all's well in Cupertino. Right? Well, unfortunately for iFanatics, the launch of Apple's first new smartphone in about a year, and its first phablet ever, has featured a service loss for some customers and a few other hiccups.
However, a potentially bigger problem comes from an old Apple rival. South Korea's Samsung (NASDAQOTH: SSNLF) is the undisputed global leader in smartphone sales, which hasn't caused much of a problem for Apple to date. Apple owns the U.S. smartphone market, at least in terms of profits, which seems to suit its investors and executives just fine. But with phablet sales predicted to skyrocket in coming years, Samsung might have an overwhelming advantage.
What's at stake
Though phablet sales have yet to take off, some estimates suggest it's a market just waiting to explode. One such prediction suggests that within the next five years, the phablet market will grow at twice the speed of the market for traditional smartphones, and account for 59% of smartphone sales. Assuming this sales expectation comes to fruition, 1.5 billion phablet devices would be shipped in 2019. Even if phablets don't quite reach the pundit's estimates, it's safe to say Apple and Samsung have a lot riding on their recent phablet forays.
Oops, sorry about that
Whether or not you follow Apple closely, you likely heard some of the grumbling coming from new iPhone 6 Plus owners. Apple's first phablet, presumably, has been a sales hit. We don't know for sure, because Cook hasn't said how many of the initial 10 million iPhone 6 units sold over the weekend were of the Plus variety.
Then came news that many iPhone owners were without service on Wednesday because of a problem with Apple's new iOS 8.0.1. But the operating system miscue was only one of the concerns surrounding Apple's phablet. Apparently, iPhone 6 Plus owners need to be especially careful with their new devices, which have a tendency to bend if a user sits on them or otherwise subjects them to undue pressure.
Will OS snafus and unintended bending of Apple's new phablet slow sales? Probably not. iFans are unlike any consumers on the planet, and a little bending, cellular outage, or complaints about short battery life -- another gripe from new iPhone 6 and iPhone 6 Plus owners -- are likely to be just a blip on Apple's smartphone sales radar. But larger hurdles lie ahead for the tech giant and its phablet hopes.
The Samsung advantage
Not coincidentally, Samsung introduced its own phablet right around the time Apple was announcing its big news. The Galaxy Note 4, by many independent accounts, not only matches the iPhone 6 Plus in most areas, it excels. While the iPhone 6 Plus display is widely considered to be one of its best features, Samsung's Galaxy Note 4 more than holds its own in side-by-side comparisons. Samsung's latest phablet has higher resolution and a slightly bigger screen (5.7 inches) than Apple's phablet (5.5 inches).
The Galaxy Note 4 is also compatible with Samsung's slick virtual reality headset, the Gear VR. How many Samsung phablet users will actually jump at the chance to slide their new Galaxy Note 4 into a VR headset is debatable, but just having the option is a distinguishing feature. And there are more than enough mobile gamers to make the Gear VR a hit.
But where Samsung's phablets really differentiate themselves from Apple's device is in the sheer volume of existing customers. Samsung sells about twice the number of smartphones as Apple, and owners are much more likely to upgrade, or decide on a phablet in lieu of a traditional smartphone, from the same manufacturer using the same OS. The U.K. is a case in point: Over half of Samsung smartphone owners who purchased its Galaxy S5 smartphone were existing customers.
Final Foolish thoughts
Apple certainly has loyal customers, too, and owners of its smartphones are likely to look to the Apple Plus 6 first when investigating phablets. But Samsung's unrivaled global customer base gives it an edge in phablets that will be difficult for anyone, including Apple, to overcome as the market takes off. Toss in a VR headset and favorable side-by-side comparisons in conjunction with its unparalleled reach? When it comes to phablets, Samsung will remain the king.
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