‘Hey, What’s That Big Phone?’February 1, 2013 6:11 am
Steve Jobs had famously said that Americans do not read books anymore. He had also declared the 7 inch tablet dead on arrival. He has said many such things – but had always acted right. For the most part, in any case. He would definitely have picked up the one strong signal that the market seems to be sending to Apple: Where is your big phone?
First, some numbers. In Q4 2012 (for Samsung, that would be the three month period ending Dec 31, 2012), Profits for the whole firm were up 76% year on year to 7.04tn Korean won (£4.2bn), but Samsung would not reveal the profit margin on its smartphone shipments or the number of devices it had sold. (Source) – but analysts say that the number is close to 65 million. Driven mostly by those 5 inch plus devices (well, 4.8 is almost 5), the S3 and the Note 2.
Apple, in comparison, sold some 47.8 million iPhones in the same three months (Source) – it was a record quarter for Apple, but the market clearly figured out that Samsung had started to ‘dominate’ Apple in Smartphones. And it sounds true – you see a lot of these big phones these days.
What had changed?
Here is our theory: Apple has always been at the forefront of ‘inventing’ product categories. It carved out space for the iPhone in-between the Desktop PC and existing smartphones, (re)inventing a whole new product category. It then carved out space for the iPad in-between the Desktop PC and the iPhone, inventing a multi-billion dollar product category called the Tablet. And then, when it was time to carve out space in-between the Tablet and the smartphone, for some inexplicable reason, they paused.
Samsung saw the opportunity, made a solid product (Note 2) and made a new product category (Phablets).
And then, there is that Stylus. Steve Jobs had sent it to oblivion. Unfortunately, when Apple was not looking, the Stylus returned.
In other words, Apple ignored the screen-size signals from the market. When folks were asking ‘Hey, What’s That Big Phone?’ Apple should have listened.