​Falling phablet prices spur sales over smaller smartphones

Phablets that cost as little as $150 will see the larger form factor become a dominant segment of the smartphone market.

Sales of phablets are outpacing those of smaller smartphones, new research has found, and falling prices should see the larger form factor take a larger stake of the overall market in future.

Phablets with screen sizes of 5.5 inches and over accounted for 12.8 percent of all mobile device sold around the world in the fourth quarter of 2014 - their highest share yet, according to a report by analyst firm GfK.

While Asia Pacific has been the region to most enthusiastically adopt larger screen smartphones like Samsung's Galaxy Note range, GfK said phablets' share of the smartphone market has doubled year over year not just there, but also in Europe and the Middle East.

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Phablets' share of all mobile sales in Asia Pacific in the last quarter of 2014 was 17.5 percent, while in the Middle East they accounted for 11.1 percent, and 6.4 percent in Europe.

In Africa, phablets' market share grew modestly over the past year to 5.5 percent, while in Latin America, they accounted for 1.9 percent of all mobile phones, up from 0.4 percent a year ago.

There's no single app that's driving the popularity of the phablet, but their large screen size makes them ideal for consuming media such as games and video. The emergence of cheaper phablets is also helping tip the scales in favour of individuals owning a phablet rather than having both a tablet and a smartphone - particularly in emerging markets.

"This means emerging markets will have a crucial role to play in their rise, and we expect to see sales increase in Africa and Latin America in 2015 and beyond," Arndt Polifke, global director of telecoms at GfK, said.

Currently however, average phablet prices are still relatively high compared to some popular low-end smartphones such as the new $150 Moto E.

According to GfK, in the fourth quarter of 2014, the average selling price for a phablet in Europe was $761, followed by Latin America at $631, Africa at $625, the Middle East at $511, and Asia Pacific at $466.

But that's rapidly changing, Polifke noted, with the emergence of phablets for $150 or less. One such handset is Xiaomi's 4G Red Rice Note, which retails in China for RMB 899 ($143). Xiaomi's smartphones are sold in India, Singapore, and Taiwan but have yet to make the leap to Europe and the US.

Analyst firm Juniper Research released a report earlier this year forecasting that 400 million phablets would be sold in 2019, five times the estimated 138 million to be shipped in 2015. The researcher expects phablets to account for 20 percent of all mobile devices shipped in the next four years. Juniper expects the emergence of cheaper phablets to drive mainstream adoption around the word.

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