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Phablets: will Europe close the gap on Asia's take-up?

by Arndt Polifke , 04.03.2014

In December last year, every fourth smartphone bought in Hong Kong, Singapore and Korea was a phablet* – a huge uplift from just 1% in June 2013. And, overall, our retail sales data shows that 3.5 million phablets were bought globally (excluding North America). With sales of these devices considerably lower in Europe, will phablets achieve the same popularity with Western consumers as they’ve experienced in Asia?

By far the biggest appetite for phablets is still focused in China, where consumers snapped up 1.5 million phablets or 44% of December’s global sales – which is similar to the share of market that China has historically taken for standard smartphones. China also boasts the greatest range of brands offering phablets (30, compared to just 11 brands in Germany), as well as 80 different models of phablets – which is twice as high as Germany.

By comparison, the next biggest purchaser of phablets, South Korea, accounted for 9% of global sales, followed by India at 5%. However, the European market is still warming up to phablet purchases. There, the leading markets for phablets are Turkey, the Netherlands and Germany, where phablets made up 5% of the smartphones bought in Turkey in December 2013, and just 3% of those bought in the Netherlands and Germany.

So what are the reasons behind the disparities of phablet demand between the different regions? Without doubt, phablets have considerably higher pricing than the average standard smartphone, since they usually come with top-end specs (like 4G), high-resolution display, excellent camera function and a high-end processor. In China, the average non-subsidized value of a phablet is EUR 445, which is about 150% more than a standard smartphone in that country. However, this barrier is countered by China’s renowned love of the latest hi-tech gadgets as symbols of personal success, together with its strong recovery from the world recession. By comparison, in Turkey, phablets average around EUR 770 which is 100% more than the average smartphone. Such an extreme price disparity is a key factor in consumer purchase decisions.

However, as phablet prices drop or they get bundled by carriers offering attractive contracts, these devices could well become a main device for internet access for large parts of the population across many markets. This is important for the communication strategies of phablet manufacturers, as well as for every company that has a focus on mobile marketing.

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This piece also appeared in Mobile World Daily | Day 2 | page 12
Source: GfK Retail Sales data
*Phablets are smartphones with displays bigger than 5.5 inches