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Apple Now Playing Catch-Up to Samsung, Android Rivals

Posted
1/2/2013 3:24:00 PM
By: Benzinga
Referenced Stocks:AAPL;GOOG

Apple (NASDAQ: AAPL ) has spent the last year suing smartphone makers that use Google's (NASDAQ: GOOG ) Android operating system, alleging that their phones are mere copycats of the iPhone.

Apple may have been correct.

However, it now appears that the Cupertino, California tech giant will spend the coming months playing catch up to its Android rivals, led largely by Samsung and its Galaxy phones.

Analysts at Barclays write that the "phablet" market (smartphones with screens 5-inches or larger) will occupy 15 percent of the smartphone market in 2013. Phablet is a portmanteau term for a smartphone/tablet hybrid -- a device too large to be a traditional phone, but too small to be a tablet.

Samsung pioneered the market with its 2011 Galaxy Note. It followed it up in November, launching the Galaxy Note II on most major U.S. carriers. Thus far, the Note II has crushed sales expectations, reportedly selling five million units in the last two months.

Originally, Samsung had said that the first Note was a device aimed at females . With their tendency to carry purses, women might be more receptive to toting around a larger phone.

However, Samsung apparently abandoned that goal with the Note II, using NBA superstar Lebron James to advertise its device.

Of course, not content to let Samsung monopolize the market, other smartphone makers have begun to move into the space. Most notably, HTC with its Droid DNA. The DNA boasts more powerful internals than the Note II, but is slightly smaller, with a screen clocking in at only 5-inches.

Then, there's Huawei's Ascend Mate . With a 6.1 inch screen, it makes even the Note II look tiny.

Barclays believes that Apple will be forced to compete to with these Android behemoths. The iPhone 5 has a 4-inch screen, which is larger than the iPhone 4's 3.5-inch screen, but it still pales in comparison even to Samsung's flagship Galaxy S3 and its 4.8-inch display.

According to Barclays, Apple will soon launch an iPhone with a screen larger than 4.5 inches.

If Apple does this, it wouldn't be the first time the company has had to follow Android's size dimensions. The company launched the iPad Mini in October, despite Steve Jobs' insistence that a smaller tablet would never work. Many analysts believe that the Mini was intended to defend Apple's ecosystem from a wave of smaller, cheaper Android-powered 7-inch tablets.

Is screen size enough of a factor to concern Apple? Those locked into Apple's ecosystem might stick with the iPhone, but those who haven't taken the plunge may opt for the larger Android devices.

Business Insider's Henry Blodget wrote in December that he was tempted to purchase the Samsung Galaxy S3 due to its larger screen, but ultimately decided against it due to his familiarity with iOS.

Apple traded up over three percent on Wednesday, near $548.

(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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