What it is: For years, the iPhone had a small screen while so-called phablets offered much larger screens. That may change soon with the introduction of the next iPhone.
If you’re selling a product that’s similar to everyone else, it’s hard to differentiate your product from competitors. That’s why Samsung developed large screen smartphones dubbed phablets because they combined the features of a smartphone with the miniature size of a tablet.
Part of the reason why Samsung and others made such large smartphones was because they couldn’t shrink the components small enough to squeeze into a smaller form factor, but part of the reason was because they also discovered a market for larger screen phones. For older people who have trouble seeing small text, larger screen smartphones wee vastly more appealing.
Large screen smartphones helped fuel Samsung’s growth right up until Apple introduced their own larger screen iPhones. Then suddenly sales of Samsung and other large screen smartphones started to fall and haven’t recovered since. Most Android manufacturers aren’t trying rot compete directly against the iPhone in the premium market but int he lower tier market and the extreme low-end of the market.
That’s why Apple may be releasing a 4-inch iPhone model soon. Some people still prefer the smaller screen size and don’t want to lug around a fat, bulky larger screen smartphone. Such a 4-inch iPhone would not only capture the market that still wants a small iPhone, but also allow Apple to offer a lower priced iPhone that could compete in the mid-tier smartphone market.
Such a move could drive Android manufacturers lower and lower into a price war where they cater only to the bottom tier off the smartphone market, making money off volumes with little profit margin on each individual unit. The larger screen iPhones have already captured 94% of the smartphone market and driven Samsung’s sole advantage into the ground. Now with a mid-tier iPhone, Apple hopes to do the same and drive Android manufacturers like Samsung further away into the commodity territory where the only differentiation possible is to keep lowering prices until there’s barely any margin for profit.
Watch Samsung’s smartphone market share and profits continue to fall and watch other Android manufacturers to see how they hope to compete against Apple. If the past is anything like the future, Android manufacturers are going to lose even more money and market share in the coming years.