Oversized phones 'could be a big plus' for operators and vendors, CCS says

iPhone 7 Plus
The popularity of oversized phones such as Apple's iPhone 7 Plus is on the rise.

The growing popularity of oversized phones is likely shackling sales of some tablets, according to CCS Insight. But it may also create opportunities for vendors of smaller connected devices.

Large-screen smartphones—or phablets—have gained significant traction since Apple introduced the iPhone 6 Plus nearly three years ago. And phone sizes continue to increase as their share of the market has grown, CCS said.

“Six-inch displays—and larger—are becoming a norm as smartphone makers take advantage of new component technologies to accommodate more screen into less real estate,” CCS said in a blog post. “Pushing displays past the edge of a phone allows device makers to offer users more screen in less space.

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“Samsung’s latest large flagship, the Galaxy S8+, provides 6.2 inches of screen at an 18:9 ratio. (This ratio falls between that of common TV broadcast content and that of modern cinema and shows how important video content has become to handset design.),” CCS continued. “The phone maker’s upcoming Galaxy Note 8 is expected to be even larger. We believe LG’s next V series will break the six-inch barrier. Phone makers are pushing the screen boundaries.”

Oversized phones sport higher price tags, naturally, and drive increased ARPU as users tend to consume more data on them, CCS observed. And the inflated prices may enable operators to sell them on lengthier installment plans, reducing postpaid churn.

And while the larger phones are likely handcuffing sales of some tablets, they may also foster demand for smaller phones and other devices in use-case scenarios where a bulky gadget isn’t practical—particularly for carriers that offer innovative services to capitalize on those circumstances.

“On the surface, it appears that there aren’t any losers here, but we believe that sales of big phones are eating into sales of small tablets,” CCS wrote. “In theory, multidevice ownership could get a boost at the other end with the need for smaller cellular devices for specific occasions, such as going for a run. This could work where operators offer a service that allows a phone number to be shared across devices such as T-Mobile’s Digits plan in the U.S. ... Phones are getting big, and this could be a big plus for the industry.”

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