Samsung banking on large-screen smartphones as phablet market grows

Samsung Electronics Co Ltd is seeking to dazzle followers of the phablet with bigger screens, and even possibly with a curved one, in its attempt to fence off a segment of smartphones once mocked for their girth and size.

Phablets, a cross between a phone and a tablet, have been on a roll since late 2011 as tech-savvy consumers, particularly in Asia, devote more time browsing data-heavy Web pages and downloading media content. Even Samsung's flagship Galaxy S4 (Review I Pictures) smartphone, released in April this year, has a 5-inch screen that puts it squarely in the phablet category for some analysts.

On Wednesday, Samsung kicked off global sales of its latest Galaxy Note 3 (Review) smartphone in Seoul. The phablet, which boasts a 5.7-inch screen and costs $990 in South Korea without a carrier contract, will be available in 140 nations by October.

Analysts say the medium-term outlook for phablets is good, but price points and the lure of their smaller, more portable cousins will keep a lid on consumer enthusiasm.

Canalys expects smartphones with 5.1-6 inch screens to make up 6 percent of the market in 2013. The Singapore-based research firm is estimating overall global shipments of 993 million smartphones this year.

"We're certainly seeing a shift for large-screen phones, but the vast majority of volumes are sub-5-inch - over 90 percent," said Rachel Lashford, an analyst at Canalys. "We would need to see devices at lower price points and from a much wider range of vendors, including Apple, to go beyond these forecasts."

The growing popularity of phablets has galvanised Western names into action.

Google's Motorola unit recently launched a 5-inch Droid Ultra, and even Apple Inc, which has stuck to a 3.5-inch form factor for its iPhone since 2007 debut, is also exploring offering iPhones with larger screens, four people with knowledge of the matter said previously.

Nokia had originally planned to launch a large-screen phablet in late September.

(Also see: Nokia Lumia 1520 launch reportedly delayed to October)

"Samsung has been the leader in this trend, helped by its ability to create and drive the segment through significant advertising and marketing," Lashford said.

Getting ever bigger
Driving the phablet's shift to the mainstream is a confluence of trends. Users prefer larger screens because they are consuming more visual content on mobile devices than before, and using them less for voice calls - the phablet's weak spot.

"When we first introduced the Note in 2011, a lot of people made a mockery of it and some even said it was doomed to fail," Lee Young-hee, executive vice president of mobile marketing at Samsung, recently told reporters.

"But we noticed that people were carrying more than three devices on average such as phones, music players and gaming machines, and we thought people may want just one device that can do it all."

Samsung says phablets are largely popular in markets such as China, South Korea, Europe and Southeast Asia.

To increase the appeal of its phablet devices, the company has introduced accessories such as the Galaxy Gear smartwatch (Pictures).

The device allows users to make calls, displays messages, records videos and snaps photos, all while the user's phone stays in the pocket or handbag.

Samsung is now planning to introduce a smartphone with a curved display next month, potentially another variant of the Note 3.

(Also see: Samsung announces curved display smartphone for October release)

The Note has since grown in stature every year since its first-generation 5.3-inch screen. The Note 3's screen is nearly two-thirds bigger than Apple's 3.5-inch iPhone, and manufacturers are increasingly adopting immense screens dangerously close to tablet territory.

Huawei's Ascend Mate has an even bigger 6.1-inch screen, and Sony's Xperia Z Ultra (Review I Pictures) boasts a 6.4-inch screen, making it only less than an inch smaller than Amazon's Kindle Fire tablet. Samsung's Galaxy Mega 6.3, has a 6.3-inch screen.

Samsung's domestic rival LG Electronics Inc is planning to launch its 5.2-inch Vu 3 on Friday.

© Thomson Reuters 2013