While phablets cater to a niche group of consumers looking for a more immersive user experience on a mobile device small enough to fit in their palm, they are for now still of little threat to smartphones or tablets.
There is currently a trend among vendors in developing phablets, or a smart mobile device with a screen size of more than 5 inches, observed Lilian Tay, principal analyst at Gartner. However, the phablet is not going to overtake either smartphones or tablets, but will continue to coexist and serve a specific need, Tay noted.
Her comments come after the launch of phablets by vendors at the Consumer Electronics Show (CES) in Las Vegas last week. Some newly launched phablets include the 6.1 inch screen Ascend Mate device by Huawei, ZTE's 5-inch Grand S, the 5-inch display Xperia Z by Sony and LG's 5-inch screen Optimus Vu.
The phablet fulfils the demands or needs of a particular group of users, who prefer screens bigger than the average smartphone but small enough to fit into one hand or a pocket, Tay explained. This group tends not to use voice as their main mode of communication as well, she added.
When they communicate, they do not speak over the phones, but will be sending messages through messaging apps, SMSes or doing a video conferencing call, she pointed out. They will also want to watch videos, surf the Internet, and this device gives them a better way of interacting or engaging using technology, she said.
For instance, Caritas Sia, a Samsung Note 2 user, told ZDNet Asia she is constantly on the Internet and always wants to stay in touch through texting. "A bigger screen gives my eyes more 'relaxation' and a more immersive experience as I use the Internet on my phone," she said.
Smaller tablets under more pressure
However, the phablet is still an "emerging product", with Samsung managing to popularize the form factor with its Note and Note 2 last year, and other vendors taking some time to develop competing products, Melissa Chau, research manager at IDC's client devices team, pointed out.
The phablet is also a differentiation strategy for Samsung to stand out from its competitors because it has become difficult in the smartphone arena to innovate, Chau explained. Other vendors are following suit as they have not thought of "better ideas", she added.
Mykola Golovko, consumer electronics analyst at Euromonitor, also pointed out the phablet was "essentially a smartphone". It is not a discrete product category, but an extension of smartphones, with their difference from smartphones being their screens, he said.
"Phablets are still too small to fully replace the functionality of tablets for many consumers, and a sizable proportion of phablet owners will still own a tablet," Golovko said.
Chau also added while the phablet is essentially a smartphone, it does pose a threat to tablets with smaller screen sizes such as the 7 inch iPad Mini. Phablets have integrated all the smartphone and tablet capabilities into a single device with a "just right" screen, so it may affect the value of small screen tablets, Chau explained.
Chau also noted industries that currently make use of the tablet such as logistics and retail, would be a natural adopters of phablets. With Samsung introducing a pen along with its phablet, industries that require signatures or have many documents to sign such as insurance and sales, would also find the phablet useful, she added.
Another Samsung Note 2 user Michael Chan, for instance, noted he would choose his current smartphone over the iPad mini. "I prefer something that fits in my hand or it would be a hassle bringing it around," he said.
Not an opportunity for ailing vendors
Regardless of whether the phablet threatens other categories or develops as a category of its own, it would not be wise for ailing vendors to jump in this space, Tay remarked. Many vendors are already jumping into the phablet market, and it will be "bloody" especially because it is already headed by market leader Samsung, she explained.
Golovko agreed, adding it would be difficult for an ailing consumer electronics firm to go head to head with Samsung which is able to produce high resolution, low power displays and processors very efficiently.
"The key differentiator for phablets is the screen, so companies that have extensive display manufacturing capabilities have the most successful product lines," Golovko said.
The market size is also not big enough for many vendors because its target consumers are "niche"--the group of consumers that enjoy bigger screens on mobile devices yet want it to be able to fit in their pocket, Tay added.
If a vendor decides to launch a phablet, they must make sure it is something different due to the potentially competitive market, not just in terms of screen size but also user experience, she advised.