Since Apple introduced the iPhone in 2007, the size of the screen on each version was the same. For the first five years, the screen on the iPhone was 3.5 inches. Then they moved to a 4 inch screen with the next generation of iPhones. But this year, Apple is offering an iPhone 6 with a 4.7 inch screen and the iPhone 6 Plus with a 5.5 inch screen. Consumers of the past didn’t have to think about which size to get. This time around, iPhone customers are actually agonizing about this and it has started a whole new dialog on Twitter, Facebook and in media columns on the pros and cons of each sized iPhone. I call this “The iPhone Conundrum” and, for a lot of people who will buy new iPhones, this is actually a very difficult question to answer. While the media got hands on with the new iPhones and were able to see the distinct differences in their sizes, Apple’s overall customer base has not and, particularly for those ordering early, they are going to have to make this decision without the touch and feel test that goes with this when they are on the shelves in the store.
Smartphones over 5-inches have actually been big hits in Asia, especially in Korea. In these countries, they serve as a smartphone and small tablet, thus the nickname “phablets”. In the US and most of Europe, phablets have not been big sellers. While we’ll see sales of about 1.5-1.7 billion smartphones this year, only about 10% of these are larger than 5 inches and classified as phablets. When we heard Apple was perhaps going to introduce a 5.5 inch phone, we almost questioned it because of the lesser demand for these larger smartphones — and Apple is all about volume of units sold. However, Apple getting into the phablet space just reflects market reality given the competitive landscape. From what we have heard, the decision to do a 5.5-inch phone was actually driven by their Asian customers.
For we industry watchers who look for trends, this begs the question of which size will drive the bigger volumes and, for Apple, what SKUs do they stock in which markets? Our educated guess is, in Asia and markets where phablets sell well, the mix will be 65% iPhone 6 Plus and 35% iPhone 6. In the US and Europe it could be switched — 65% iPhone 6 and 35% iPhone Plus. While I think this is actually a good projection, it is by no means foolproof. One could argue the reason demand for smartphones with larger than 5-inch screens has not taken off in the US is because Apple did not have one to sell. At this point we just don’t know how many US customers will want the 5.5-inch model. We are hearing about some early surveys and, to my surprise, there is a lot of interest in the 5.5 inch iPhone now it has been announced but, until people start buying them, I don’t think any of us researchers can accurately predict what that mix of phone sizes will be in the US and Europe. This is Apple’s conundrum.
Trying to forecast demand for the US launch of these new iPhones has to be a difficult one.
From the customer’s standpoint, this decision demands serious consideration. The majority of people in the US market actually put their smartphones in their pockets. This is especially true of men and many women. Of course a lot of women, including my wife, keep their phone in their handbag when they goes out and lays it on the counter when at home. In this case, size matters.
I have been carrying a 4 inch iPhone 5S, a Galaxy Note III 5.7 inch and a 4.7 inch Amazon Fire with me for months. The iPhone 5, which is my primary smartphone, is carried in my front pocket. The Note 5.7 inch is in my right hip pocket and my Amazon 4.7 inch Fire is in my left hip pocket. I did this to test these sizes for a long period of time to get a sense of how these work in the real world. While I like the Galaxy Note’s larger screen size for things like reading and web browsing, it is jut too big to put in my front pocket. Even in a hip pocket it is taller than the pocket itself and a small part is exposed. Interestingly it fits there well and has never broken or gotten scratched even though it bumps up against a chair when I am sitting. Same goes for the Amazon Fire although with its 4.7 inch screen I can put it in my from pocket with ease.
I am personally struggling with this decision myself. The women in my office have all told me they want the 4.7 inch model and have not even considered the larger version. But in my case, I do like the bigger screen since it makes it easier to surf the web and read text. As I have aged, this has become a factor since it gets harder and harder to read things on smaller screens without my reading glasses. Another factor for me is my go to tablet is the iPad Mini. That means I carry a smartphone and a tablet around most of the time. The one reason I lean toward the iPhone 6 Plus is I know I would use it as a phablet as I do the Galaxy Note III today. I like the ultra portability of a smartphone but one with a larger screen allows me to use it in a “phablet mode” too.
There is another key consideration that goes back to Steve Jobs’ design goals for an iPhone. Jobs believed all iPhones had to be able to be used with one hand. He was adamant about this. The fact they now have a 5.5 inch phone that cannot be used in one-hand mode for most people shows Tim Cook was willing to break ranks on Jobs’ one-handed operational mantra and respond to customer and market demand with the iPhone 6 Plus. If I got the iPhone 6 Plus, I give up this important feature for me but the tradeoff of a bigger screen making it easier to read will probably sway my final decision.
In the end, demand for either new iPhones will be so high I wonder if Apple can even meet demand, especially for the first three months. Most financial analysts believe Apple could sell as many as 60-65 million iPhone’s in the holiday season, compared to 51 million sold last holiday. However, I think actual demand for these phones in Q4 could be way more than Apple can produce, which means the iPhone 6’s they do make will sell quickly. Nice problem to have and, as most financial analysts predict, Apple will most likely have record sales when all are counted early in January, something that will clearly make Wall Street and their investors very happy.