Samsung, Apple to Battle for Phablet Market, Says Barclays

Let the phablet wars begin, as Barclays predicts the reigning champ, Samsung’s “Galaxy Note,” will face competition from Apple in 2014.

Barclays Capital‘s Asia-based wireless and mobile technology analysts, including Dale Gai and colleagues SC Bae, Yuji Fujimori, and Kirk Yang, along with others, today offer a longish (54 pages) group report in which they opine that the phenomenon known as the “phablet” — a cross between a smartphone and a tablet computer — is sweeping the globe, and “changing the competitive dynamics of the mobile device market,” as a result of what may be strong sales over the next three years.

The authors go so far as to say that phablets will be the main driver for several technology migrations — a bigger driver than smartphones or tablets: “While these technology migrations are also being applied to other devices such as mid-sized smartphones or 10-inch tablets, we believe the market for phablets will become the most competitive, due to higher volumes.”

And they offer the following chart of those technology migrations (click for larger image):

The early winner in the phablet wars is Samsung Electronics (005930KS), the authors write. Samsung’s “Galaxy Note,” which is on its second iteration, is perhaps synonymous with the term in many people’s minds, as reports this morning indicated the device may be on track to sell 10 million units by the end of this quarter after just coming to market at the end of the year.

The phablet, usually distinguished by a 5- or 7-inch screen is the “next fast-growing data consumption mobile devices,” which may see as much as 70% compounded annual growth through 2015, helped by rising 4G wireless access globally, improvements in display technology, and prices, ultimately, as low as $200 without carrier subsidies.

That means an increase from perhaps 84 million units shipped last year to perhaps 402 million in 2015, they opine.

Phablets have become a general area of high-end smartphones, rather than a separate category, they write:

Based on ABI [Research's] definition, a phablet is defined as a smartphone with a display between 4.6 inches and 5.5 inches. However, the original definition has become obsolete, in our view, as the screen sizes of mainstream high-end smartphones (excluding the iPhone 5) in 2H12 have all migrated to displays of 4.6 inches and above. We believe the term phablet should apply to all crossover mobile devices, ranging from mainstream smartphones (4-5 inches) to small-size tablets (7-80 inches).