Brute-Force Mockup of an iPhablet
Barclays analyst Ben Reitzes told his clients on Monday to expect Apple to release a 5-inch iPhone—or iPhablet—in either the last quarter of 2013 or the first quarter of 2014. He said that the form factor is popular enough that Apple will not be able to ignore it.
In the research not obtained by The Mac Observer, Mr. Reitzes wrote that, “Apple has stood firm that its iPhone is ideal for one-handed use, which is true in our opinion. However, one handed use is arguably less important as phone calls become less and less crucial – the larger form factor has caught on for navigation, texting, videos, books and web access.”
The analyst makes a great point, and he added that, “the larger screen seems to be more popular outside of the US and the phablet has significant momentum in China.”
Apple has identified China as a market that will grow larger even than Apple's enormous market in the U.S. If Chinese consumers think that larger devices are the bee's knees [蜜蜂的膝蓋], you can be sure that Apple has taken that into account when CEO Tim Cook made his statement about the Chinese market.
Mr. Reitzes also noted that the broader global tech team at Barclays believes that the 5-inch smartphone market will grow from 27 million units in 2012 to 230 million units in 2015, with growth outpacing the growth of the overall smartphone market. He believes Apple could grab 20 percent of that market.
So what's ahead for 2013? The analyst said that this year will see Apple focusing on improving services and iOS. He believes that Apple will be able to expand its market with such improvements.
“We believe Apple can turn perceptions around with a real move into payments, an integrated iOS-led television service and improvements to iCloud (including subscription-based services),” Mr. Reitzes wrote.
He added, “These services must be powerful enough to 'allow' Apple to 'sit out' the 5-inch phone market for most of the year without significant share loss.”
Part of that formula is the reality that Apple's App Store has some 800,000 apps, and that much more money flows through the App Store than through Google Play or other competing markets. That keeps developers investing in iOS apps, which helps make iPhone, “arguably the most useful phone in the market.”
Raising a point thatTMO's staff has had on its collective mind of late, Mr. Reitzes noted the exceedingly disproportionate amount of usage the iPhone has compared to market share leader Android.
“For example,” he wrote, “according the NetMarketShare.com, the iOS operating system was responsible for over 60 percent of mobile internet activity for NetMarketShare.com’s partner websites while Android represented almost 25 percent.”
Mr. Reitzes maintained his “Overweight” rating (the equivalent of a “Buy”) and a $575 price target.
AAPL closed on Monday at $442.316, a loss of $11.304 (-2.49 percent), on light volume of 17 million shares trading hands.
*In the interest of full disclosure, the author holds a tiny, almost insignificant share in AAPL stock that was not an influence in the creation of this article.