​In India, where size matters, phablets fly off the shelves

Phablets have obliterated tablet sales and may soon become the dominating choice for consumers of smartphones.

If you walk or drive down a road in New Delhi, you're bound to become quickly acquainted with one of the essential tenets of life in India -- bigger means better -- as waves of SUVs casually and brutally shoulder aside anything else that dare stray into their paths.

(Image: Xiaomi)

The size fixation also applies to smartphones. In the last year, Indians have unanimously voted with their pocketbooks by choosing phones that have outsized screens that are between 5 and 7 inches in screen size, dubbed 'phablets'.

These phablets have registered a scorching growth rate, selling a staggering five times more in this last year than what they did in the previous period, with 50.8 million units being sold and revenues quadrupling. By contrast, smartphones, while selling close to 69.67 million, only grew 33 percent.

It is no surprise that one of the victims of the rise of the phablet is the computer--desktop PC growth (units) slumped by 4 percent while notebooks got pummeled by 15 percent as consumers in India continue to leapfrog the PC revolution and access the internet over their large phones.

However, the biggest upset was in the tablet category. This once hot segment that was expected to soar, registered only 4 percentof the share at 3.4 million units in the previous year and is expected to 'de-grow' by 14 percent this year. The promise of the tablet revolution seems to be sputtering out.

Meanwhile, phablet sales worldwide has also been going gangbusters. IDC has predicted that global sales are set to rise to 318 million units in 2015, easily outstripping not just the earlier forecast for the year at 233 million units, but almost doubling the sales numbers in 2014 for both phablets, 175 million, and portable PCs at 170 million units.

In the US for instance, phablets made up 21 percent of sales during the first quarter of 2015 -- four times the figure for the previous year, according to Kantar WorldPanel Comtech.

This shouldn't come as a shock since Apple has recognised that its money spinning iPad, whose sales peaked in 2013, is going through an existential crisis and that the only way to keep the company's coffers overflowing is by cannibalizing it with a larger phone. Consequently, the 5.5 inch iPhone 6 Plus has quickly become not just the most popular phablet in the West at 44 percent share, but has beaten Asian juggernaut Samsung at its own game here.

However, the region that has shown the most ferocious appetite for these devices is Asia. Flurry Analytics says that 50 percent of smartphone sales in Taiwan and Hong Kong are for those with screen sizes of five inches or more, versus 20 percent globally. India is at 29 percent, while South Korea has been labeled the land of the phablet for its craze for larger phones.

Replacement rates for tablets have been slower worldwide because consumers don't see any reason to upgrade. In India, this trend does exist but is dwarfed by the fact that the hundreds of millions with modest incomes don't really want or need to buy a laptop or a desktop. Their phablet connects them to their two biggest needs: the net and a phone line.