Apple has a few serious problems in the market: The iPhone has a 3.5-inch screen, but virtually all of the competing phones are 4-inch and larger. Meanwhile, 7-inch tablets are gaining popularity, and they’re available from Amazon and Samsung, but not Apple.
Steve Jobs was firmly against increasing line complexity, which is kind of weird given the success of the iPod line. But rumors hint that Apple is about to release a bigger iPhone and a smaller iPad. Let’s chat about why both would be a good idea.
Winds of change
If you look at this month’s Consumer Reports, you’ll notice some interesting things. One is that Apple, on 10-inch tablets, holds the number one and the number three spot with the third- and second-generation iPad. (Samsung is second.) Another is that Consumer Reports has begun covering 7-inch tablets because volumes have come up sharply.
On the phone side, things are pretty scary for Apple. The iPhone has dropped below the middle of the pack for AT&T — and that’s the good news! It is either dead last or next-to – last for every other carrier.
RIM and Microsoft have also been dropping for a while, and they aren’t even on the lists this time.
In short, Apple has two problems: There is a growing segment of the tablet market where Apple doesn’t compete, and its smartphone is, based on its comparative size, too small to keep up with the new market leaders.
A smaller iPad
Long thought to be a product graveyard, the 7-inch form factor was once seen as too big for a phone and too small for a tablet. However e-readers changed all of that. It turned out that 7 inches was pretty much ideal for an e-book, and if you already had it for an e-book reader, it was one hell of a lot better for movies and Web-viewing than a smartphone, and still more portable than a 10-inch tablet.
Suddenly, the 7-inch tablet is selling. The expensive Samsung 7.7 is ranked best in class, and not that far behind the iPad overall. But that is likely because the tablet was weighed against the gold standard that the iPad represented. If it went the other way, where the benefits of portability were ranked higher, I doubt the iPad would have done equally as well. In other words, in an alternative universe where Samsung set the standard rather than Apple, the iPad likely wouldn’t have done as well against the 7.7 as the 7.7 currently does against the iPad. (No wonder Apple is trying to block Samsung’s tablets in the US.)I’m a Kindle user and so is my wife. We both tend to leave the larger tablets at home and take our Kindles on the road. You quickly find that most of what you want to do with a 10-inch tablet, the 7-inch does reasonably well, and it is a lot easier to carry. I can drop mine in the pocket of a jacket, and my wife puts hers in her purse.
Portable devices don’t do you much good if you have to leave them at home. And a 7-inch, at least for us, has proven far more useful. I’m actually carrying a Windows 8 tablet instead of a laptop now. It is the nearly 12-inch Samsung Series 7, and it is as portable as the iPad but just a tad small for my work. This makes me wonder if the 7-inch is actually the better form factor for things folks do with the iPad (that is, media consumption). One wonders what would have happened had Jobs come out with the 7-inch first, since the 7-inch Kindle has always outsold the 10-inch — though, according to Amazon, the 10-inch users are more loyal.
A larger iPhone
The current belief is that the coming iPhone 5 will have a 4-inch panel, not a 5-inch one. An increasing number of folks think that any 4-inch would be eclipsed by powerful new 5-inch phones like the coming 5-inch LG Media Phone. Many suspect that both the smaller iPad and the larger iPhone will be announced in the same month (October) if not at the same time.Currently I carry the Nvidia Tegra-3-based HTC One. The nearly 5-inch screen is vastly more useful than the 3.5-inch screen phone I had been carrying. Consumer Reports agrees: Most of the phones that outrank the iPhone are also in this class. Reviewers found the larger screen to be vastly more useful.
If the rumors are true, Apple is right to come out with a smaller, and likely cheaper, iPad to compete with Amazon and Samsung, and to come out with a larger iPhone to avoid falling off comparison charts. I wonder if Apple should jump all the way to 4.5 inches, in order to better compete with this emerging class of Super Smartphones. In any case, I expect it will eventually make the bigger move to a larger screen.
This is going to be an interest fourth quarter, a true test for Apple’s new leadership. It’ll be really interesting to see the battles between vendors, and between sizes. I wonder though, if we’ll have too much choice and lose interest in the market. Both tablets and smartphones are getting rather confusing, and consumers aren’t fans of confusion.
Guest contributor Rob Enderle is the founder and principal analyst for the Enderle Group, and one of the most frequently quoted tech pundits in the world. Opinion pieces denote the opinions of the authaor, and do not necessarily represent the views of Digital Trends.