The Post-Tablet Era

Bob O'Donnell / January 14th, 2014

Coming off what will undoubtedly be the best quarter that tablet sales have ever seen, you might wonder if I’m a bit crazy calling 2014 the potential start of the post-tablet era, but hear me out. In truth, 2014 could be the start of the post-device era.

the number of total smart connected devices being sold continues to grow at a faster rate than the population

As the ongoing record attendance figures for last week’s International Consumer Electronics Show (CES to the rest of us) demonstrate, people’s love affair with gadgets continues to grow. So, how, you must be thinking, could I possibly make such a ridiculous assertion? Ironically, in abundance, there is often indifference. Or, to put it another way, the more devices we all “collect” and use, the less each one actually matters. No matter which brand, operating system or device type you prefer and no matter how you choose to draw the boundaries between all of these different things, there’s one fact that no one can ignore: the number of total smart connected devices being sold continues to grow at a faster rate than the population. That means the total number of devices owned (and presumably used) per person is growing—and rapidly.

Plus, even a quick glance at the market share—either by brand, by operating system or any other metric you prefer—will show you that the numbers are not growing equally across these different breaks. This implies a wider variety of combinations that people end up owning. Now, admittedly, this last point is a bit tougher to prove, but common sense will tell you that as more devices from more brands become available, the likelihood that people will end up with a diversity of different brands and operating systems grows. But, it’s more than just common sense. Research projects I have worked on over the years show definitively that while there are certainly strong correlations between the brand and/or OS of your smartphone and your tablet, for example, the two are not always identical—even among iPhone or iPad owners.

Another factor to consider is that the number of hours in a day is not increasing (despite our often intense desire for it to be so), so it’s not difficult to imagine that people are spreading their available time across their various devices. Again, research backs up this intuition and shows that while there certainly has been shifting of time between devices—from TVs to PCs and from PCs to tablets, for example—there is no uniformity amongst time spent with devices. Some people spend more time with PCs, for example, some with tablets, some with smartphones and so on. What everyone is still doing is, however, is using those devices—whatever particular combination they may own—to get things done, whether that be pure entertainment, pure productivity, pure information or, more likely, an interesting combination of them all.

This focus on activities—as opposed to the devices upon which you do them—brings me back to my original assertion. While there is absolutely no question that tablets have had (and will continue to have) a monumental impact on the device market, I would argue they have had an even more profound impact on how certain types of “computing” are done. The simple, touch-based interface has enabled the creation of an entirely new set of application genres and allowed smart intelligence to be brought into situations and environments that would never have allowed “traditional” computing devices to enter.

However, I would argue that this new form of computing isn’t directly tied to the tablet form factor and screen size and therefore the tablet device, as it’s commonly defined. Instead, it has more to do with the resolution of the screen and the connectivity of the device. In this regard, the new kid in town—“the phablet”—has some clear advantages over many tablets. First, the smaller screen sizes of phablets (5’’-7” in my view) actually make the devices more portable than tablets, without sacrificing resolution. Plus, by definition, a phablet is a phone—meaning it has a built-in 3G/4G modem. At best, a third of tablets ship with these radios built-in, but given the enormous amount of connectivity-dependent applications, this 100% radio attach for phablets is a huge advantage, especially when you are not within an available WiFi hotspot. Finally, in most cases (at least in the US), phablets are subsidized by the telco carriers, meaning the actual out-of-pocket purchase cost for the phablet is almost always lower than a tablet.

As I’ve discussed before, too many people get caught up with the notion that the phablet is a ridiculously large smartphone to hold up to your ear—this completely misses the point. As with a tablet (or for that matter, almost any size smart phone), a phablet is a mobile, portable computing device being used to achieve what it is that people want to get done. And for a lot of people—it’s just a better value than a tablet. So, while I’m not certainly not going to predict the demise of tablets, I do think that a lot more “tablet computing” will get done on phablets this year and that will have a profound impact on how the device market evolves in 2014.

Bob O'Donnell

Bob O’Donnell is the president and chief analyst of TECHnalysis Research, LLC a technology consulting and market research firm that provides strategic consulting and market research services to the technology industry and professional financial community. You can follow him on Twitter @bobodtech.
  • Herding_sheep

    “too many people get caught up with the notion that the phablet is a ridiculously large smartphone to hold up to your ear—this completely misses the point.”

    And the “phablet” (ugh, can the media please retire this hideous name) completely misses the point of a tablet. I’d counter your statement by saying too many people get caught up with the notion that the tablet is simply just a larger screen, and you seem to be one of them. A tablet is not just about having a larger screen. A tablet is all about the software, as any good software platform should be. A phablet literally runs all of the same software that you could run on any other Android phone. Same exact user interface, same exact experience, simply scaled to a larger display size (for the most part). The added utility from this is minimal compared to an application thats been entirely rethought to make more imaginative use of the larger real estate. Or even entirely new applications that aren’t available on smartphones.

    A phablet completely misses the point of having a larger display, and instead of offering an experience unique to a smartphone, it simply offers the same experience scaled larger. The thing I find ironic is that all the iPad haters who called the iPad “a giant iPhone” back in 2010 are now using devices that literally ARE giant smartphones, and calling them iPad killers. So long as the iPad continues to offer software that is well-thought and designed make imaginative use of the larger canvas, the iPad will continue to be a superior experience to a phablet. Just about half of the 1mil apps in the App Store are redesigned for the iPad’s more-expansive UI, and I don’t see this trend slowing anytime soon.

    • Bob O’Donnell

      Thanks for the comments, and yes, I agree that phablet is a rather unattractive name. But to your argument, I would counter that it’s not really screen size that matters but screen resolution. If (and perhaps when), Apple offers a >5″ iPhone with the resolution of an iPad, then all of those iPad apps will run just fine on the new device and you’ll get all the benefits of the “tablet” experience on a device that is easier to carry, always connected and, for some, cheaper to buy.
      The point is, while most phablets are indeed Android devices right now, this will not always be the case. The Nokia Lumia 1520, for example, comes from the Windows Phone world and heck, even Blackberry has announced their Z30. The point of the column was to raise questions about the often presupposed dominance of the tablet and say that there could be some interesting competition looming ahead.

      • Space Gorilla

        Does anyone have actual sales data for “phablets”? I wonder if they’re as popular as some people think.

        Also, screen size matters. The screen is the computer.

        • Bob O’Donnell

          Yes, my old company IDC does and I know that as of the last data I saw, phablets were already close to 15% of all smartphones worldwide. In South Korea, which is a pretty savvy tech market, they were almost 75% of all smartphones in Q3 of last year.

          • Space Gorilla

            What other data sources do you have? I seem to remember some problems with IDC numbers recently, but maybe that was some other firm. I like to have three credible sources. Not saying IDC is incorrect, but it’s good to have more sources. It would also be good if we could dig up usage data on phablets, to see how they’re being used. If phablets are going to affect iPads then the usage data has to be fairly similar, otherwise it’s just two different tools being used in different ways, so there’s not much point in making a comparison. I seem to remember some data recently that showed cheap tablets competing with TVs and not the iPad. That may have been Benedict Evans?

          • Bob O’Donnell

            I believe several other firms have relatively similar numbers–DisplaySearch, Strategy Analytics, probably Gartner, etc. One interesting thing to bear in mind–and honestly, I just thought of this–the total size of the phablet market would be in the same range (low teen % of total) as the iPhone’s share of the WW smartphone market. Kind of adds a new perspective….

          • Space Gorilla

            Again, is this shipments, forecasts, or sales? What new perspective comes from the possible reality that devices with a certain size of screen made by many manufacturers might collectively have a similar percentage of the total market as the iPhone? All that I can glean from that is that each company’s phablet sales are very low as a percentage of their overall smartphone sales, which actually supports my theory that phablets aren’t as popular as a lot of people think. I mean, if you have to group them all together across all companies, just to equal the iPhone’s small share of the total market? Add in that we don’t even know if we’re talking about actual sales or just shipments or forecasts. I’m not convinced yet, I need better data.

          • Bob O’Donnell

            Virtually all of the major market research firms report what’s called sales in data, which means sales from the vendors into distribution. Sales out data is much harder to come by in many parts of the world (NPD offers this in the US), so it’s very difficult to put together a WW sales number. However, when you’re talking about big picture trends like this, the numbers start to equalize over time because you can’t keep shipping products into distribution if they aren’t being sold out on the other end. It may take a half quarter or quarter to see all this, but the two are definitely linked.

          • Space Gorilla

            Okay, so the short answer is this is NOT sales to end users, it is shipments. I agree the two are usually linked, but what we really need is *sales* data. Is there really any way to tell if Samsung is just moving numbers around to obfuscate a difference between shipments and sales? Perhaps the real reason we don’t have a larger screen iPhone yet is the opportunity isn’t large enough today to interest Apple. Seems like from your own data (rough as it is) phablets are in the single digits for each manufacturer.

          • benbajarin

            Your thinking on this is exactly centered on the right question. I happen to know exactly how many big screen phones (phablets) have been sold in the US and it is extremely low comparatively. Although I will say with each new Note released by Samsung each one sells more than the previous in the US. So it is at least something but it is in now way large volume. Low single digits as an overall percentage of smartphone sales.

            I throw that out there because I look at each region and the devices / form factors that are doing well in each region.

            The single largest market for larger phones is Asia as many have pointed out here. And in fact THE single largest market for them is South Korea where it is likely 20m notes have been sold alone. Nearly half the total amount Samsung reported selling into the channel.

            Also to your point without question a percentage are sitting in a warehouse we just don’t know how many.

            So all of that plus my market data on big phones reveals the following conclusion for Apple. You can make the case that a larger phone (something around the 5″ size) is important for Apple to compete in Asian markets. This is a sound conclusion with a lot of evidence to back it up. We know there is a strong desire to buy an iPhone and I would bet serious money that there would be unprecedented demand to buy a larger iPhone in those markets.

            Now Apple may also release it in the US but one could make the case the US is not the target market for this device given the low number of sales of Notes in the US to date. OR perhaps a larger screen iPhone is the second coming for the iPhone in the US. You could make a case that Apple could single handedly make this category in the US by themselves given their dominance in this country. My point is that even though big phone sales are low in the US today, if Apple does one they could all of a sudden be large.

            So I can see this going a number of different ways but I do strongly believe that Apple should do a slightly larger screen size than 4″ and it would do very well in markets like China particularly.

          • Space Gorilla

            Thanks for the info! I do think Apple will make a larger screen iPhone, but only when the timing is right for Apple, so maybe it happens in 2014 and maybe not. Unless Apple has some other solution to the problem a phablet solves, but a larger iPhone does seem to make sense.

          • stefnagel

            Good info. And I truly believe Apple knows all this and lots more about when and where and if to deploy larger screens. Me? I’d like my iPhone to run on sunlight and I know millions more would like that too. Damn that Apple, why can’t I have what’s obviously an improved version of the iPhone?

          • jfutral

            I also wonder the affect of adding another product to the product line would do to their supply chain. In one not very small aspect, Apple still doesn’t reach the carrier distribution breadth most Android device makers reach, even as they continue to expand. While it could be argued that if anyone could afford to expand their supply chain with pocket change, Apple could. But then they would still be facing uncertainty with their current distribution. In other words maybe they know something about the phablet market with the carriers they currently partner with that either it isn’t large enough yet to act or maybe their entry into that market, if it is large enough, would have a negative impact on regular iPhone supplies.

            Just a thought and not very focused, not that I have any reason to think I am on to something. But I think you get my drift.

            Joe

          • klahanas

            “I also wonder the affect of adding another product to the product line would do to their supply chain.”
            A very legitimate business argument…for Apple. For buyers, choice is good, supply chain is Apple’s problem.

          • jfutral

            @klahanas:disqus Just pondering why Apple may or may not be willing/able/interested to release a larger iPhone. I agree choice is good. But I also don’t hold that every company _must_ address every consumer or they are toast. And if a consumer really wants a larger smartphone, there is no shortage of options. Choice already exists, so I don’t think that is the subject of this part of the discussion.

            But then I’ve been known to veer or swerve in odd directions that take some thinking through to figure out the relevance of what I post. 🙂

            Joe

          • klahanas

            Well, for one, it’s about serving your user base. If indeed a sufficient number of Apple users want a larger phone and are not getting one, they are not being served. They are serving Apple. Keep in mind that if even 5% of Apple’s user base wants one, that’s like a bazzillion users. You don’t put % in the bank 😉
            As with anything else, competing forces will establish a new equilibrium. It just takes time.

            Edit: As far as doomed goes, I agree that’s ridiculous. It will take a series of issues, unaddressed, over a large time, to doom Apple.

          • stefnagel

            As South Korea goes, so goes …

          • Bill Smith

            Asia…a very large market that everyone would love to be successful in…

          • stefnagel

            I was going to say North Korea. Asia? Sorry. That’s not supportable even as a guess.

          • Space Gorilla

            Another question, was this shipments or sales? I’m not that interested in shipment data, I want sales data.

          • 15% is slightly higher than my estimates but glad to have some solid data. Thanks.

          • Space Gorilla

            Well, it’s data, I wouldn’t say it’s ‘solid’ though.

      • Herding_sheep

        No, absolutely not. Screen size does in fact matter. It doesn’t matter if a 5″ iPhone gets the same resolution as an iPad (disregarding the fact that iPads and iPhones have completely different aspect ratios). Running an iPad app on a 5″ iPhone screen will result in tap targets and user interface elements that are far too tiny to interact with. Even running full iPad apps on an iPad Mini, you start to see the limits that 7.9″ is the smallest Apple could go for iPad apps and still offer a good user experience.

        So yes, screen size is incredibly important. Especially in an environment like iOS.

      • Anders CT

        A larger iPhone will not have the resolution or aspect ratio of an iPad. That would just suck.

        Pre iOS7, iOS apps where generally coded to s specific resolution, and device resolitions where generally doubled or kept the same. iOS7 introduces rich functionality to make apps resolution-independent and adaptive to screen sizes. Similarly to Android post 1.6.

        We can expect iPhablets and iBooks when a lot of apps has been optimized for iOS7.

    • Space Gorilla

      I read a good quote on the iPad = bigger iPhone, something along the lines of how that was similar to saying a swimming pool is just a bigger bathtub. Framing it that way makes the stupidity obvious.

    • Anders CT

      That is not entirely true. In Android and iOS7 it is easy and perfectly possible to make apps that does not simply scale up with larger screen sizes, different aspect ratios and resolutions. Nor do touch-targets stay the same. It is the poor design if iOS pre iOS7 that forces developers to make different apps for the various resolution buckets of iDevices. iOS7 goes a long way in fixing that deficiency.

  • Bill Smith

    [Empirical mode ON]
    I have a Korean niece who loves her native language soap operas. In that culture, putting a phone the size of a waffle iron next to your ear is completely acceptable, even stylish. She sees the iPhone as a kid’s phone (smaller = not for adults).

    My best friend, though I supply her with a ready stream of iPads and iPhones, clings to her Android waffle iron. For her, big=prestige. Note that she tools her way to work daily, the lone occupant of a Ford Expedition.

    Both have commented that if they could find a larger “phablet”, they would buy one, and are confused by the iPad not being able to act as a phone. As women, they already carry “bags” that contain water bottles, emergency medical supplies, snack food, hand wipes, perfume, makeup, keys and even spare underwear. A 5-7″ phablet fits right in.

    As long as half the population is female, and there are those for whom size is a fashion parameter, there will be a place for these devices.

    Many seem to have ignored market segmentation for this product category. There’s great potential for a fashion-branded, scratch-resistant phablet for women, perhaps with pre-loaded, targeted apps.

    BTW, another very well executed article by Bob. It’s one thing to probe the edges of popular thought. It’s a far rarer thing to do so with finesse. Great job!

    • Bob O’Donnell

      Thanks Bill….

    • steve_wildstrom

      Note-class phones are also very popular, as phones, in China.

  • db

    My son, age 11 and his friends use their iPads as phones simultaneously using Google Docs on the iPad to white board their ideas either for school projects or anything else they can think of. Sometimes they communicate with their iPhones or iTouch along with using their iPads simultaneously to have large group interactions. For these pre-teens, the hardware is not the main tool, it’s the use of the software and how they can use it best to fit their needs.

    They care less about the hardware and care more about what app and services are available. I think we as an older generation fail to see how to implement the technology in ways that were not intended to be used. I believe these kids are quite creative in the way they are using hardware/software. They are also using Chrome Books with other equipment to use Google services as a way to interact with each other in real time. It’s quite fun to see how kids are using tech.

  • chano1

    Many of these new devices are one-trick ponies with zero, or very little, scope for doing more. I suspect that there is one reason why Apple never ever wastes time thinking about any such ideas. Most of these devices could easily be replaced by an iOS app on hardware that is equipped to do what they do better, faster, more extensibly, using better displays, a better MO and, when useful, linking to other complementary apps or accessory devices that extend their functionality in every way the user might wish or imagine. It is rather like comparing the one-trick original iPod with iTunes with iOS’s Music app on any current iDevice.

  • Anders CT

    Wheter you classify a phablet as a large phone or small tablet with a baseband modem is somewhat arbitrary. There is no reason why there should not be a continuum of handheld device sizes.

    I find a smartphone just short of 5 inches diagonally to be about right. An iPhone is way too small for me, and the Note 3 is somewhat to big, but not wildly so. I guess it is matter of preference.

    • jfutral

      I remember back when it was pretty much just Palm and Blackberry asking my brother which I should get. His response was “Depends on if you want a PDA that can act as a phone or a phone that can act like a PDA.” As such it seems you and I are that comparison as I find the iPhone 5 already a bit too large. Seems to me a phablet is more a tablet you can use as a smartphone. I don’t need a phablet.

      Joe

  • klahanas

    “more devices we all “collect” and use, the less each one actually matters.”

    Between my hobby, business, and multiple work locations, I have a lot of computers and devices. I’m far from a typical use case (being a hobbyist immediately disqualifies me from that), but perhaps I’m a case for testing that statement.

    I have my “go to” machines. One in my home office and the other in my job. Both are self built i7 hexacore beasts, with SSD RAID, video acceleration, spinning disks, yada, yada. As an aside, you get a lot of flexibility as a hobbyist because you more likely have parts and components somewhere. You can also scavenge parts from retired machines and use them elsewhere, while repurposing the machine. My server, for instance is a retired i7 laptop attached to an 8 GB box (Box $150, spare drives). But I digress…

    Then come the laptops. I have a desktop replacement laptop for when I’m going to be away for an extended period. This stays on a desk wherever I’m staying. Then there’s the daily purpose laptops. One for meetings (a Vaio Duo 13) and another for “lunch” and sometimes the backyard. Both have excellent pen input.

    Any of these machines allow me to fully function anywhere in the world. But, as I’ve hinted, they are based on usage scenario and setting.

    Then there’s the tablets. They rarely leave the house (except on a flight). They are “coffee table”, couch and bedside devices. Yet another usage pattern.

    Back to the statement. Being a data point of one, I can assure you losing my desktop will matter. It will matter a lot. This is followed by my desktop replacements, then the “meeting” and “lunch” laptops. The tablets, actually, are now dispensable. I find I’m using them less and less, except for my bedside tablet, where I read or watch a movie, but this is all to easily replaced now. Tablets did influence the evolution of the PC, but are dispensable. I guess what I’m trying to say (and conclude myself) is “they matter less and less, but not equally”

  • Space Gorilla

    A late addition for what it’s worth, just saw a tweet on Asymco: “In Europe the first wave of phablet owners are now coming to upgrade, over 40% are down-sizing to a smaller device.”

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