I think that we are mostly discussing whether Apple should build a new iPhone that is larger than the iPhone 5, but smaller than the Galaxy S4 (which is 5" inches). The reason is that 5" smartphones are not popular and represent only a small share of the market (see chart below).
So would an iPhone in the range 4"< / >5" be a strategically smart move? Let's see what the customers are currently prefering/buying. Apple Insider reported in February that
Apple's iPhone 5 and iPhone 4S are the world's two most popular smartphone models, followed by the Samsung flagship Galaxy S3 (see chart below).
So a 4" inch model is the most popular smartphone, and a 3.5" model is the second most popular smartphone, followed by a 4.8" model. While it shows that the demand for Apple's phones is very strong, it also shows that there is strong demand for a smartphone model with a 4.8" screen. The question is whether the customers who bought the S3 bought it because of the screen size, the price or the Android operating system. I don't have any data on that, maybe someone on the board has something.
- If customers bought it because of the operating system, Apple will not be able to win them over.
- If it is price Apple might get these customers if it offers its newest models for a lower price. Currently, Apple is trying to offer customers cheaper iPhones by discounting older models. However, people who buy the latest Samsung Galaxy usually want the newest model in the market and might not be interested in cheaper but older iPhone models.
- If they bought the S3 because of the screen size Apple needs, of course, to manufacture an iPhone with a larger screen to be attractive for this customer segment.
However, what would be the right size? When is big too big? Sascha Segan from PCmag.com thinks that it depends on whether you use your smartphone with one or two hands. If you use it with one (like he does) it means that "
a phone needs to be about 2.6 inches wide, which generally also means a 4.3-inch diagonal screen.". Segan asked why the screen sizes have been growing steadily, basically leaving the one-handed user behind. He writes "The OEMs told me that U.S. carriers and shoppers buy based on checklists, and on those checklists, moar is more. They also look on shelves, and on shelves, bigger is better. So screens get bigger, simply because "bigger" equals "more value" in Americans' minds."
While this might paint a not very flattering picture of the US consumer I think that it might be accurate for a not insignificant number of smartphone buyers. But would these customers also buy a (likely more expensive) iPhone if it had the same screen size as the S3? I don't know. Anecdotal evidence among my friends (here in Germany) leads me to think that there are two groups among the Samsung flagship buyers. One group which is totally against Apple, and one group which is feeling that they get more for a lower price than if they would buy an iPhone. And with "more" they usually cite screen size. The argument is that with a larger screen they can better surf the internet, look at picture, and watch videos. However, according to a survey (
Kantar Worldpanel ComTech from Q2/2012) there doesn't seem to be a huge difference in usage between smartphones with a screen size of 4.0"-4.4" and smartphones with a screen size of 4.5"-4.9" (see below chart).
So an iPhone 6 with a 4.3-4.5" screen seems to be a size which is larger than the current offering, but not too big for the still significant segment of one-handed smartphone users. But what negative implications would it have for Apple to offer a bigger iPhone, in addition to the 4S and the 5? I can imagine two, but maybe people on this board who are way more knowledgable about this might add some more point:
1. App development:
Would the additional screen size make it less attractive/profitable for app developers to develop new apps for iOS? Would that lead to less quality apps and a worse experience for the iPhone user?
2. Lower economies of scale in production:
Would costs not be able to be spread over many products? Would margins take a hit?
I don't have knowledge or information on these questions, but maybe you guys have?