iPhab not so fabulous for Apple profits

Posted on by Mike Evans


I like the idea of a phablet as a replacement for iPhone and iPad mini. One device makes a lot of sense and, as I have said often, phone calls are now the least of the iPhone's attractions. Why, I often wonder, do I need to carry around both phone and tablet.

Apple, I feel sure, are watching this segment of the market and realising that larger phones are actually popular. The problem is profit margins. Not only would a phablet shrink margins, it would also cannibalise sales of both phones and tablets. This article in Seeking Alpha explains just how much a phablet could hit the bottom line.

Despite this, author Michael Blair sees Apple moving inexorably towards a tablet:

Apple is very likely to introduce an iPhablet. My view is that the effect will be to generate considerable enthusiasm among Apple investors and users of Apple products, but from a financial point of view, I suspect the benefits will be muted and consistent with what we have seen from Apple for a few quarters now - lower market shares, shrinking profit margins, stagnant profits and lower share price.
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