Here Come the Phablets: Shipments to Top Tablets in 2015

Beware the coming phablet flood certain to breach the levees with Apple’s (AAPL) impending Sept. 9 debut of the oversized iPhone 6. According to researcher IDC, phablets aren’t only the wave of the future but also of the present.

Shipments of so-called phablet smartphones, or mobile devices with screen sizes of 5.5 inches to 7 inches, will pass that of portable PCs in 2014 and top tablets in 2015, the researcher’s latest data shows. IDC expects manufacturers to ship 175 million phablets this year, more than the expected 170 million portable PCs. Next year, with 318 million units shipped, phablets will exceed by 36 percent the 233 million tablets forecast to ship.

IDC expects phablets to grow to about 32 percent of the worldwide smartphone market in 2018 from 14 percent in 2014, driven by emerging market growth and declining prices. For example, last year a phablet could be had for about $568 but this year the average selling price (ASP) has dropped some 30 percent to $397, the researcher said.

In addition, phablets are beginning to apply serious pressure to tablet shipments, as evidenced by the slowed growth of the 7-inch mini tablet segment, with consumers heading back to larger screen tablets, IDC said.

“With Apple expected to join the space in the coming weeks, we anticipate even more attention on phablets as larger screen smartphones become the new norm,” said Melissa Chau, IDC Worldwide Quarterly Mobile Phone Tracker senior research manager.

The trendline toward phablets notwithstanding, the mobile device market remains in flux, with consumers in mature markets such as North America and Western Europe more likely to own a PC, smartphone and tablet but in emerging markets the smartphone, irrespective of size, is the sole choice. That, more than any other factor, explains why smartphones are expected to grow as a percentage of the overall smart connected device market from 70 percent in 2014 to 75.6 percent by 2018, according to IDC’s data.

“Clearly, mobile computing is a space where consumers are still trying to figure out what mix of devices and screen sizes will suit them best,” said Tom Mainelli, IDC Devices and Displays program vice president. “What works well today could very well shift tomorrow as phones gain larger screens, tablets become more powerful replacements for PCs, and even smart watch screens join the fray.”