Tech Innovation

Phablets in 2015 – Signaling a Butterfly Effect for Mobile Devices?

Ken Kaplan Executive Editor, iQ by Intel

Maybe they’re just small tweaks to make bigger smartphones or smaller tablets, but the rising popularity of phablets could lead to a faster global shift to more always-connected touchscreen computing devices.

Experts may not agree on whether these things are more like a big smartphone or a small tablet, but they are in sync about the big splash phablets will make at next month’s Computex event in Taipei, Taiwan.

Some even see increasing demand for phablets not only impacting how tablets and phones will evolve but also how people are using mobile devices, particularly people around the world who are buying phablets as their first Internet device.

These hybrid mobile devices typically come with screens that are only five to seven inches diagonally across, just like the Asus FonePad 7 and the Asus Zenfone 5, both priced affordably in the $200-250USD range.

Last year, 20 million of the 980 million smartphones shipped globally were considered phablets, and according to Juniper Research that is expected to grow to 120 million phablets by 2018. On the higher side, Barclays analyst Ben Reitzes believes that by 2015 sales of phablets will grow to 230 million units.

“What we’re seeing with Phablets is less a new distinct category and more the emergence of a single continuum that starts at 3.5-inch and moves up to 10-inch plus tablets,” said  Geoff Blaber, vice president of research at CCS Insight, in an interview earlier in the year. By that he is referring to mobile touchscreen devices with built in 3G and LTE communications capabilities.

“The fascinating part is the widely different distribution characteristics between smartphones, phablets and tablets. That has big implications for everyone in the value chain.”

Blaber expect 5.5-inch to 6.9-inch devices to account for 10% of global smartphone shipments by end 2015.

“Bigger screens are becoming essential for browsing,” Tim Coulling, a senior analyst at Canalys said, in a recent interview with The Guardian.

“They make it a lot more attractive – you can fit more information into a single screen. Media consumption is becoming more and more important. That requires a larger screen. Email gets easier on a big screen too.”

Common in a handful of recent interviews with tech industry insiders was the notion that phablets may seem like a hybrid or simple fusion of phone and tablet, but their growing popularity could result in significant changes both for device makers and people using them as their first real computing device.

Sales of phablets today may seem like a trickle compared with smartphone and tablet sales, but it could be akin to the “butterfly effect,” a method for predicting hurricanes based on how distant a butterfly had flapped its wings several weeks earlier.

Early indications for interest in tablets are mostly coming from Asia and Japan, according to Gregory Bryant, vice president and general manager of the Intel’s Asia-Pacific and Japan region.

“There’s an explosion of mobile devices here similar to rest of the world, but unique is the rapid rise of phablets,” said Bryant.

Bryant sees a few key things driving interest in phablets in his region, which is comprised of large, mature and growing economies.

“Demographics skew towards younger people,” he said. “They are extremely mobile, very social, like to share information, photos, and content with family and friends. They are very, very active on the Internet.”

Opera Mediaworks, a mobile ad network, recently studied people using Samsung Galaxy Note, Sony Xperia Z, HTC One Max, Nokia Lumia and LG Optimus G Pro and other phablet-like devices. The report showed that even though attention was focused on click-through activity in the United States, the majority of traffic originated from countries in Asia.

For many living in those regions, their first Internet experience is on a mobile device, and increasingly it’s on a phablet, said Bryant.

“Often their first Internet capable device has all broadband and voice with a larger screen. It becomes a decent tool for social, browsing and sharing.”

Industry analyst Tim Bajarin of Creative Strategies sees this demand for phablets in emerging markets increasing, although to date many people living there can afford a smartphone, and that’s often their only computing device.

Bajarin believes that consumers in these markets may not want or have the ability to afford two devices, so a phablet brings them the best of both worlds because it’s a phone when they want to communicate and a tablet when they want to connect.

“Smart phones are training wheels for emerging markets, where there are a lot of people who’ve never touched a PC,” said Bajarin. “Many there are saying, ‘I’d like to do more.” Next step for them will be a phablet or tablet.”

An article in Vietnam.net recently stated, “Instead of spending big money on tablets and laptops, Vietnamese users now tend to choose hybrid devices which allow them to save money and satisfy their multi-purpose needs.”

Bryant sees interest in phablets not just moving into emerging markets but also into more mature markets such as Korea, where sales of bigger phones are outpacing larger tablets. This was reflected in a recent IDC report, which correlated a slight drop in tablet shipments to rising sales of smartphones with bigger screens.

“Consumers won’t want three or four devices,” said Bob O’Donnell of TECHnalysis Research, describing what he sees as a strong reason why more people in mature markets will turn to phablets. This shift may become what he calls the “mega-computing” trend this year.

Whether phablets are a threat to tablets or a promising device that is helping bring more people to the always-on Internet, industry analyst Patrick Moorhead of Moor Insights & Strategy thinks more device makers will be jumping on the bandwagon.

In an interview, Moorhead said he’s expecting to see some cool phablet-like surprises at Computex and certainly some new devices never seen before.

While Computex is already a huge show, attracting more than 130,000 people, phablets are just one example of how Taipei and surrounding regions are blossoming beyond their PC industry roots into new areas of innovation, said Bryant.

“Computex is absolutely, without a doubt, not just a PC show,” he said. “It’s cloud, datacenter, tablets, PC clients, 2 in 1s, wearables, smart connected devices.”

Although phablets expected to stir the biggest buzz at Computex, Bryant expects to see the benefits of new mobile computing innovation spurring sleek devices not seen before, including new 2 in 1 designs that are thin, fanless, lighter and more affordable than ever before.

“We’ll see new ChromeBooks, which are becoming very popular for educators in my region, and a fair amount of new desktop and portable all-in-one PCs,” he said.

While the butterfly effect of phablets may end up being a simple divergence in the evolution of personal computing, it could very well lead to significant changes that connect more people around the world to the Internet. Many of them for the first time.

Who wouldn’t want to be a part of that?

 

Esther Andrews contributed to this story.

Photo by Computex Taipei.

 

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