Some iFans may recall it was just over a year ago when Apple (NASDAQ:AAPL) CEO Tim Cook went on record saying he had no intention of jumping into the deep end of the phablet pool. Phablets, as you may know, are larger screen smartphones, generally considered those with screens of at least 5.5 inches, up to about 7 inches in size. Why did Cook feel so negative toward phablets? A larger screen device, according to Cook at the time, would compromise battery life, and ultimately, the life of the phablet itself. Cook added, "My only point is these products all served a different person, a different type, they served different needs." Bottomline: no market, no Apple phablet.
Thankfully for Apple investors, and assuming the vast majority of rumors surrounding its pending "big event" are correct, Cook has changed his feelings toward introducing an iPhablet. Today, phablets continue to occupy a relatively niche market. But, if recently released sales projections prove to be anywhere close to accurate, the release of an Apple phablet could be the fuel the burgeoning market needs to really take off.
Great phablet expectations
When Apple rival Samsung (NASDAQOTH:SSNLF), the world's number one seller of smartphone's, introduced its first phablet a few years back, there was certainly some head-scratching. After all, many phablets are a bit large to slip into a user's pocket, but not quite as large as a tablet. What are you supposed to do with this new Galaxy Note phablet thing?
Turns out, assuming recent sales projections from Business Intelligence come to pass, Samsung may have simply been ahead of its time. As mobile device users turn more and more to their smartphones for streaming video, becoming immersed in the latest game, and check their respective email and social media accounts, the slightly larger screen size of a phablet is beginning to look like it could be a game-changer.
Sometime in 2016 phablets will overtake smartphones in annual global shipments, according to estimates. As smartphones sales slowly begin to level off, phablet sales are expected to continue growing to as many as 1.4 billion units by 2018. As the market for traditional smartphones becomes saturated, and tablet sales continue to be pressured, there's some logic to Business Intelligence's estimates. And that's where Apple's rumored big screen, iPhone 6 enters the picture.
Haven't we seen this movie?
While the Samsung Note is widely credited with introducing phablets to the masses, it isn't the only option for consumers. It was about this time last year Nokia, running Microsoft's (NASDAQ:MSFT) Phone OS, introduced the world to its first line of phablets, the Lumia 1520, and lower-end Lumia 1320.
Though Nokia's phablets were unveiled with a ton of fanfare, and sales estimates for the market as a whole were expected to jump, phablets have yet to really take off. Research firm IDC expects phablets will comprise roughly 10% of all smartphone sales in 2014. As impressive as that is, it's not quite the sales boon industry pundits expected. But that could change when Apple and its rumored iPhone 6 take the stage.
The Apple effect
It's no secret that Apple boasts what amounts to the world's most ardent fans. There are actually people camped out in front of Apple stores, and have been for a full week ahead of its "big event," waiting for one of the expected two new iPhones. A bit over the top? Yes, but it's also indicative of just how much influence Apple has over mobile users. If any device manufacturer can bring phablets to Main Street, it's Apple.
Ironically, Samsung, Microsoft, and other manufacturers will likely benefit if Apple's iPhone 6 phablet is successful, too. Why? If iPhone 6 sales take off, phablets will have miraculously stepped out of the smartphone shadows and gone mainstream, giving prospective phablet customers a reason to find out what all the excitement's about.
Final Foolish thoughts
Concerns about phablets further eroding tablet sales, particularly mini-tablets, are legitimate. In fact, phablets were cited by IDC as part of the reason tablet sales have leveled off so quickly. The question is, will an easing of tablet sales because of phablets really matter? If Apple is able to fuel the phablet market fire with its iPhone 6, those lofty sales projections over the next several years will likely come to pass. If it does, Samsung, Microsoft, and others will owe Apple a rousing "thank you."
Tim Brugger has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.