Big Questions about the Big iPhone

I have stated publicly I believed Apple would launch a larger screen iPhone than the current 4″ model this year. The market is simply at the point of its maturity where options are necessary. As markets mature, consumers become more self-aware of their needs, wants, and desires. It’s at this point the competitive dynamics change and segmentation occurs. Form factor (screen size) options, pricing, colors, etc., are all results of consumers looking for products that suit their needs as they also refine what those needs are. This is why a range of product options is important to Apple in my opinion. It was important when they built out the iPod line for the same reasons. The difference was they eventually owned the iPod market out right. This time they own the premium market, mostly out right. But they are up against a competitor who will offer every form factor under the sun in the mid-high end segments of the market.

For Apple, the question is not whether they need to offer more screen size options, but what screen sizes to focus on. Current rumors are they are looking to offer two different larger screen form factors. Something in the 4.7-4.9″ screen size range and a 5.7″ device. I believe the 4-7-4.9″ screen size rumor to be in the ballpark. The 5.7″ device? I’m not sold on the rumor but let’s take a closer look.

The first thing we have to remember about any Apple hardware rumour is, like every other company, they build and test a number of designs. Simply because they built and tested a 5.7″ screen sized iPhone doesn’t mean they will ship one. The big question around releasing several larger screen options revolves around how many SKUs Apple wants to manage. Will their current generation lineup be a 4″, a 4.7-4.9″, and a 5.7″ screen? This is hard to believe given the way Apple has done things.

What is interesting about the rumor on the 5.7″ device is the point that they will be positioned as high-end 5cs. This would be counter to several other rumours saying the devices would specifically target the high-end, when in fact this is exactly what a larger iPhone should do. The 4.7-4.9″ screen iPhone particularly (I like the name iPhone Air) would be a premium product targeting the premium segment of the market. However, should a product that fits the design build of the 5c that is not targeting premium be in the lineup then it makes sense it would specifically target a market like China.

If a 5.7″ screen iPhone comes out it would not be targeted at developed markets like the US and Europe. I’m not saying it won’t appeal to some consumers in those markets but I don’t believe it will appeal to the masses in those markets. It would appeal to markets like China where phones with screens between 5.5″ and 6.5″ do quite well. These markets buy these large-sized phones rather than buying the combination of a smartphone and a tablet. It could be very interesting for Apple to position an iPhone as a type of “minnier” iPad. While we know there is demand in China for both iPhones and iPads, many consumers can not afford both, and many can barely afford one. However, should the two be combined at a decent price point in a single product I wonder if consumers in China or even India would be compelled to make the investment even if it costs a bit more than the competition’s solutions.

I’ve been of the opinion if Apple really wanted to take China by storm they should release a product that is China only or China first. Doing so with a product like a 5.7″ screen iPhone/iPad could be a very interesting strategic move that would do very well in the Chinese market. While I still have my doubts about the 5.7″ device offering, I believe it could make sense in the context I just outlined.

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Ben Bajarin

Ben Bajarin is a Principal Analyst and the head of primary research at Creative Strategies, Inc - An industry analysis, market intelligence and research firm located in Silicon Valley. His primary focus is consumer technology and market trend research and he is responsible for studying over 30 countries. Full Bio

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