When it comes to portable devices, size matters. And Apple’s iPad and iPhone are finding themselves outclassed by both smaller and larger competitors, respectively. Is it finally time to change?
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.
Size matters
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.
As usual Rob Enderle misinterprets everything. Apple has ZERO problems in the market, just in Enderle’s warped analytic mind. Others wish they had Apple’s “problems” which mainly are how many more billions will they make this year and how much higher will the stock climb. The sales of Apple iPhones the quarter before a new iPhone is coming out is always lower but by no means catastrophic. (Just wait and see what happens when the iPhone 5 comes out this October…)
Size of the display isn’t the only criteria of being “outclassed.” Apple outclasses every other competitor in about every way, including the aforementioned much larger profits. Personally I love the smaller 3.5″ screen rather than using a pocket hog like the 5.3″ Androids. My 9.7″ iPad 3 takes care of all else.
BTW people can justify just about anything – bigger vs smaller – either way, or none of the above. People can justify tablets and computers shouldn’t even exist at all (and maybe they have a point). One things for sure, Apple isn’t “changing” because of one imbecilic Enderle article, don’t flatter yourself Rob. Your opinion(s) is about as reliable as zero cred John Dvorak’s these days.
These Apple strategies are worked out way in advance. If an 8″ iPad comes out Apple it won’t mean they read your article(s) and said “Holy Cow, Enderle’s right!.” If it arrives they will regain spots 1,2 &3 on the top seller tablet (or should I say iPad since all else are mere tablets) list and Samsung a distant 4th, assuming they can sell any “slavishly copied” tablets at all. Windows 8 or WART tablets are anyone’s guess but my guess if after an initial surge they will drop by the wayside only bought by the true geeks & Apple Haters. All else will bask in the well thought out Apple solution.
Peter, even Apple has to think ahead in terms of evolution. Competitors are forcing Apple to make a smaller tablet. Amazon, Toshiba, Samsung etc all have smaller tablets. If people are “being trained” that smaller is better and Apple doesn’t have an offering, then people might be tempted to pick a product other than Apple.
Remember, innovating companies think ahead and are adaptable. It’s the old way of thinking (think media companies, cable companies) that will get a company into trouble. Apple is being smart here.
And for the record, Apple will likely release a larger phone and a smaller iPad. Analysts and the media have already predicted this. So Rob is spot on.
“Peter, even Apple has to think ahead in terms of evolution.”
I believe I just said that Ian. Apple has most things planned out well in advance. You are guessing when you say competitors are “forcing” Apple to make the smaller tablet. There’s nothing to suggest this was not in their playbook (no pun intended) all along other than an old Steve Jobs quote back reflecting the not-ready-for-prime-time state of the art of 7″ tablets in 2010. Things have changed and Jobs would have changed with it too, if he hadn’t already. I’ve already made the points elsewhere you make that Apple would fill this hole in their lineup as a $299 price entry (or less) and wouldn’t want others filling in the gap. Apple also knows whenever they would decide to offer something in this area they would immediately be the Number One offering and so have taken their time to get out what others have rushed to market as they know their opportunity time is limited. Maybe we’re preaching to the choir here?
I only resent Rob’s implication that based on something HE wrote Apple will respond when it’s been in the works no doubt for a while, all on the cusp of it about to happen. That a lot of hubris and Enderle’s reputation and opinion is pretty spotty to be generous. Predicting a larger iPhone and smaller iPad is a no-brainer already. Not exactly putting himself out on a limb as a lot of his other more usually harebrained prognostications. He’s the kind of guy who will talk himself into using inferior tech as somehow the better way. Fortunately the rest of us aren’t as easily fooled.
So you resent something I didn’t actually say and that triggered an ad hominem attack? Nice… Just to be clear I am not claiming Apple is following advice I gave after they already made a decision. That would be kind of silly.
I hear ya brother Peter! :)
I was guessing at what Apple would do, and being presumptuous that they were responding to other manufacturers by releasing a smaller tablet. But I don’t work for Apple, nor do I know Tim Cook, so all I could do was assume as an outsider.
Given the world hadn’t grasped modem phone capabilities that we see today, it seems only a short few years ago that many debated about buying a phone as large as an iPhone. Here we are today asking “is it too small?”… We’re a funny lot!.. Physically I think the iphone is big enough to be at that “nice size” to carry. If a larger screen within the current outer dimension is possible, I’m all in!.. Please don’t shrink my iPad though, I think it’s just fine.. And yea,,nice article rob!
The tablet I carry has a nearly 12″ screen and, I’m with you, the bigger the better. Good news though the smaller iPad will simply be an option. It is interesting to note, however, that with the Kindles (ePaper versions) the 10″ version sells a fraction of the 7″ but the customers for it are the most avid fans the Kindle has. It is an interesting stat.
Well I find myself, again believing that your articles are very well written. In comparison, with the run of the mill inkers, not a word I guess, continue to be worth the time to read. Someone is going to think I am a relative for always patting you on the back.
Thanks for the nice comment!
another fun read rob. what is the perfect size seems to be the question these days. it is indeed curious that apple is staying with small phones. i’m using a 5.3″ galaxy Note and it is “vastly more useful” than my sister’s ‘dinky’ iphone. i prefer to read kindle on my Note than the Fire. since the 7″ tablets won’t fit in your jeans, i’m wondering what are the advantages the 7″ size has over the 10″ tablets. price? a bigger tablet would seem to be a better choice for the coffee table. coconutz247
Thank you sir!