Some users appreciate the the added tablet functionality of a phablet without having to purchase a second device or sign a second contract, while others are critical of the larger screen sizes and bulky designs.
According to research done by International Data Corporation (IDC), the rise of phablet popularity is contributing, in part, to a perceived ebbing of tablet shipments. IDC had originally projected 260.9 million units, but has since projected a shipment of only 245.4 million units in 2014. According to Tom Mainelli, program vice president of devices and displays at IDC, it has dropped for two reasons.
"First, consumers are keeping their tablets, especially higher-cost models from major vendors, far longer than originally anticipated. And when they do buy a new one they are often passing their existing tablet off to another member of the family," Mainelli said in an IDC press release. "Second, the rise of phablets - smartphones with 5.5-inch and larger screens - are causing many people to second-guess tablet purchases as the larger screens on these phones are often adequate for tasks once reserved for tablets."
The data that IDC uses to support the claim that phablets are cannibalizing tablet sales is its claim that the phablet share of smartphone shipments has gone from 4.3% at the beginning of 2013 to 10.5% at the beginning of 2014. According to the IDC press release, "'Phablet' is defined as a smartphone with screen size of 5.5 to 7 inches."
According to IDC, the tablet market, which includes hybrid tablet/laptops, had a year-over-year growth rate of 51.8% in 2013, which dropped to a projected year-over-year growth rate of 12.1% in 2014. While there may be some correlation between the rise of phablet sales and the slowing of tablet sales, it doesn't necessarily mean there is a direct causal link between the two.
When asked about his research and the research done at his firm regarding phablets and tablets, Michael Facemire, a principal analyst at Forrester didn't see a possibility for phablets to overstep their boundaries and take some of the tablet market.
"I simply don't see an under-sized tablet or an over-sized phone eating into the existing tablet market," Facemire said.
This is partly due to the fact that phablets are still very much smartphones and exist in a different product lifecycle than tablets do. But, According to Facemire, it makes sense for companies to sell a product that they can present as existing in two different markets.
"If I can blur the line between what is a phone and what is a tablet, now I can blur the line on growth numbers," Facemire said. "So, I as a phablet manufacturer, say Samsung with the Note products, I can take the best of both worlds. I can say I've got phone renewal rates plus tablet functionality. Therefore, sell at an equal or higher price point than a phone, and keep growth numbers alive."
You must first consider the use cases for tablets and how that compares to smartphones. Phablets entered the market in an attempt to combine some of the best features of tablets with a smartphone to eliminate the need to purchase a second device. So, there's a potential that phablet owners wouldn't have been tablet owners to begin with.
"There are some people who are very enthusiastic about large devices, just the same way that there are some people who are very enthusiastic about SUVs," said Carl Howe, a vice president at the Yankee Group. "That doesn't mean we're not going to sell any cars anymore."
Howe also mentions that Yankee's Current projected compound annual growth rate for tablets was 21% and its current projected annual growth of smartphones is 15.9%, meaning Yankee is actually projecting a higher growth rate for tablets than smartphones. When asked what he believes that 21% means relative to the original, astronomical growth numbers of the early tablets, Howe said: "You could call that a plateau, or you could simply call that a nicely growing mature market."
The main point of contention here with Mainelli's original statement is the correlation of phablet sales to a "decline" in tablet sales.
"I do not see a plateau, I do see a slowing down. It's just kind of a natural evolution," Facemire said. "When the iPad was announced there were tablet makers, but not real consumer tablet makers. So, obviously, there's going to be big year-over-year growth numbers; and that naturally has to slow down in a space where the hardware can remain functional for a long time."
When it comes to Mainelli's initial point that tablets are being kept longer than anticipated, that makes a lot of sense. Unlike smartphones, tablets do not exist in an purchase cadence that is necessitated by phone upgrades and 2-year wireless contract renewals.
The first iPad, which arguably initiated the consumer tablet market, was released in 2010, a mere four years ago. Aside from power users, most tablet users don't have the type of use case or use patterns that would necessitate a regular upgrade. Facemire mentions that both of his children have an first generation iPad, as do his parents and, four years later, it still serves its purpose for their needs.
Tablets are still young, and whether or not they are in danger of stalling out remains to be seen. However most tablets don't have a price point or software updates that are conducive to the upgrade cycle seen by smartphones.
That's why oversized phones, or phablets, are seeing some success, especially among professionals who don't want to carry two devices. Keep in mind that tablets often serve niche purposes in the enterprise, and phablets don't necessarily have the apps suite, screen real estate, or functionality to compete with these specialty use cases.
Conner Forrest has nothing to disclose. He doesn't hold investments in the technology companies he covers.
Conner Forrest is a Staff Writer for TechRepublic. He covers Google and startups and is passionate about the convergence of technology and culture.