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'The demographic dividend of the last 40 years is ending': J.P. Morgan says the world is running out of the two things that kept interest rates down

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Jensen Huang made his $172 billion fortune on AI chips. His family's $75 million gift to Vanderbilt argues art decides what technology is for

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The $39 trillion U.S. national debt isn’t as high as Japan’s and Singapore’s relative to economy size—and yet it's still worse somehow
Tech

Sorry folks, phablets are here to stay and this is why

By
Jason Cipriani
Jason Cipriani
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By
Jason Cipriani
Jason Cipriani
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August 27, 2015, 7:13 AM ET
The camera and flash of an Apple iPhone 6 Plus gold, is shown here at a Verizon store on September 18, 2014 in Orem, Utah.
The camera and flash of an Apple iPhone 6 Plus gold, is shown here at a Verizon store on September 18, 2014 in Orem, Utah.Photograph by George Frey—Getty Images
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Hey Levi’s, it’s time to start making jeans with bigger pockets: phablets are here to stay.

According to a new smartphone forecast from the International Data Corporation (IDC), the demand for smartphones with screens between 5.5- to 6-inches (a.k.a. phablets) is expected to grow 84% in 2015.

By 2019, devices with screens between 5- and 7-inches will account for 71% of smartphone shipments. Can we all agree a smartphone with a 7-inch screen is not a smartphone? It’s a tablet.

One of the driving factors behind the increased demand is Apple’s doing, says the IDC. The release of Apple’s 5.5-inch iPhone 6 Plus last fall has put demand for the large-screened devices at an all-time high.

Looking at recent Android smartphone announcements you’d be hard pressed to find a device under 5.5-inches. Samsung’s Note 5 and S6 Edge+ and Motorola’s Moto X Style all offer 5.7-displays. The OnePlus 2’s screen measures in at 5.5-inches.

Android devices with big screens are not a new trend, but the abundance of devices with screens over 5.5-inches seems to be unmatched.

A bigger screen translates into higher selling prices, an added benefit for device manufacturers and—according to the IDC—means nearly all flagship device lineups will feature large screen through 2019.

The IDC expects Android to remain steady with an 81.1% share of global shipments through 2019. Apple’s market share will slip, down from 15.6% in 2015 to 14.2% in 2019. Windows Phone is expected to jump a percentage point to 3.6% in the same timeframe. The “Others” category is expected to grow four-tenths to 1.2%.

The flat outlook for Android and decline for iOS can be attributed to Android manufacturers targeting the sub-$200 price, especially in unsaturated markets like India. China, on the other hand, is reaching a maturity level on par with North America and Western Europe. Even if Apple (AAPL) were to release a budget iPhone, IDC believes it will struggle to compete with Android manufacturers due to Apple focusing on higher margins instead of higher market share.

Despite the maturity, it’s expected China will continue to lead in smartphone growth through the forecasted period. However, India has the “most potential upside.” The same upside is one of the driving factors behind smartphone manufacturers plans to manufacture devices in India.

Overall, the smartphone shipment forecast is slowing down. Shipments grew 27.5% in 2014, and only expected to grow 10.4% in 2015.

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