Samsung Mega Phablet Seen Pushing ‘Boundaries’ of Voice-Enabled Device

When Samsung ships its supersized smartphone, the Mega ($149), through AT&T Wireless Friday, it will enter the limited air space occupied by the Huawei Ascend and the Sony Xperia Z Ultra, a category of over-6-inch smartphones, or phablets, that is encroaching in size on the most popular tablet segment. As consumers continue to use phones more for Internet-enabled activities such as social networking and watching videos than making voice calls, the trend to larger screen sizes makes sense, analysts said, but the newer half-foot phablets, or hybrid mobile device, may have crossed the line, analysts told us.

"Five (inches) has become the norm now,” Carolina Milanesi, analyst at Gartner Group, told us, but she thinks the six-inchers “are pushing the boundaries” of what consumers want. “They're a large device to carry with you all the time,” she said. “The beauty of a phone is that it’s small and fits in your pocket."

Mike Morgan, analyst with ABI Research, himself a user of a 5.5-inch phablet, is “conflicted” about the inch more of screen real estate that the Mega presents in a device that purports to be a phone. “If you can’t get the tips of your fingers to wrap around the edge, I don’t think it’s going to be a phone in any way, shape or form for you,” he said. That said, “We're talking less and we're doing data more,” Morgan said, citing the correlation between larger screen sizes on phablets and the amount of video watching done on them. That’s a win for handset makers who can charge more for premium products, carriers who can make more on data plans and for consumers’ enjoyment of the device, he said.

Sprint, too, will carry the Mega, although not at launch. The carrier responded to Monday’s AT&T announcement with its own news that it will offer an unlimited data plan for the phablet when it begins selling it later this year. Sprint said other carriers are moving away from unlimited service, but its Unlimited Guarantee locks customers into unlimited talk, text and data for the life of the line of service, with a minimum two-year commitment. Sprint hasn’t disclosed pricing or availability of the Mega, nor has U.S. Cellular, the other carrier that will sell the device, the companies told us.

A larger screen begs for longer viewing time, and an unlimited data could top the priority list for phablet buyers who don’t want to bang into a data ceiling. “You wouldn’t buy such a large device just to do voice calls on it,” Milanesi said. Larger screens encourage more video use, and video consumes a lot of bandwidth, making unlimited data an attractive wireless plan offering as devices gobble up more bandwidth, she said. She predicted Sprint’s unlimited data plan will be highly popular with consumers.

AT&T, meanwhile, is offering its recently unveiled AT&T Next program for the Mega, which incentivizes subscribers to buy a new phone every year by paying for a device over 12 payments at $24 per month and then being able to upgrade to a new phone without a down payment, activation fee or upgrade fee.

Milanesi noted that European phone users once upgraded every 12 months but that as phones have improved in quality, that upgrade time has stretched out to 18 and now 24 months. “I think that upgrading every year in a world where there [are more advances provided] by software than by hardware is going to be a challenge,” she said. A few years ago consumers were better off upgrading rather than changing a battery because the latter was more expensive due to consumer-friendly hardware subsidies for phones. “Now technology has gotten much better, the phones have a longer life” and many of the functions and pluses of today’s phones are delivered through software, making a hardware upgrade unnecessary, she said.

While phablets are a niche market in the U.S., they have been popular in markets where smartphones aren’t subsidized. In emerging countries many consumers buy them as a compromise product between a smartphone and tablet so they don’t have to buy two mobile devices, Milanesi said. They're popular in China and Korea because the larger screen size makes alphabet input easier than it is with a keyboard, she said. And they're popular in Hong Kong, she said, where a larger phone signals that a consumer has bought the latest technology.

The 6.3-inch Mega, running Android 4.2.2, is less than an inch (diagonal) smaller than the most popular tablet category at 7 inches. Samsung has stuffed in tablet-like features designed to make the device a TV companion. Additional features include Samsung’s WatchON TV software that allows the phone to recommend TV programs and act as a remote control for home theater equipment via the built-in infrared blaster; Air View hover technology for previewing email or calendar items; and Multi-Window display for split-screen viewing, according to specs. The device has an 8-megapixel camera.

ABI Research forecasts that 892 million smartphones will ship worldwide this year, up from 664 million last year. Last year, 10.9 million phablets -- defined as smartphones with screen sizes larger than 5.1 inches diagonal -- shipped, and that number is expected to jump to 34 million this year. Tablets, meanwhile, are expected to reach 161 million shipments this year, up from 117 million last year, according to ABI. The phablet doesn’t overtake either of the other two categories through 2018, ABI said, but will steadily grow from 68 million shipped in 2014 to 107 million in 2015 and reaching 172 million in 2018, it said.