Handset makers scurry to join Year of the Phablet


Samsung's marketing heft has paved the way for others. LG Electronics Inc accounted for 14 percent of shipments in the third quarter of last year, according to

Strategy Analytics.

HTC Corp's 5-inch Butterfly called the Droid DNA in the United States has been selling well in places where Samsung is less dominant, according to Taipei-based Yuanta Securities analyst Dennis Chan. The first batch sold out soon after its December launch in Taiwan.

"I don't think we can say that Samsung invented phablets," said Lv Qianhao, head of handset strategy at ZTE. "But it did do a lot to promote this product category, which helped create tremendous demand."

Phablets are also proving popular in emerging markets. A poll of nearly 5,000 readers of Yahoo's Indonesian website chose Samsung's Galaxy Note 2 as their favourite mobile phone of 2012, ahead of the iPhone 5.

Kristian Tjahjono, a technology journalist who posted the poll, said phablets were a natural fit for Indonesians who liked tablets but also liked making phone calls.

But while those in such markets who can afford them are going for the high-end devices, the door is opening for cheaper models. Tjahjono pointed to Lenovo's 5-inch S880, which has a lower resolution screen and sells for about $250, which is around a third of the price of Galaxy Note 2.


Falling component prices will add to demand. The total cost of an upper-end phablet, its bill of materials, will likely fall to 2,000 yuan ($323) this year, says Gai from Barclays, and will halve within two years. "One thousand yuan is a very sweet spot for China," he said.

India is also a fan.

Vivek Deshpande, who manages global strategy for Shenzhen-based mobile phone maker Zopo, says that while the Indian and Chinese markets are different, they both share a common appetite for aspirational devices: phones big enough for their owners to show off. This is changing the direction of lower end players.

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