Will Apple hit back at Samsung with phablets and a $99 mini iPhone?

Leaked plans suggest that iPhones with 4.7-inch and 5.7-inch screen sizes are in the works, as well as cheaper, colourful handsets

Sources speaking to Reuters have suggested that Apple will be diversifying its range of iPhones – creating models with larger screens, and cheap versions of the smartphone in a range of colours.

During the Worldwide Developers Conference hosted by Apple earlier this week (the WWDC), the company was strident about its ability to stay ahead of the market. “Can’t innovate any more, my ass,” was senior exec Phil Schiller’s comment as he revealed the new Mac Pro.

But despite the new products introduced at WWDC it seems that the Californian tech giant might be aping the success of South Korean competitor Samsung, whose market strategy revolves around an ever expanding line of handsets, as well as phones with larger screen – the ‘phablet’.

Reuter’s sources, described as “four people with knowledge of the matter”, say that Apple is aiming to introduce two larger iPhones – “one with a 4.7-inch screen and one with a 5.7-inch screen.”

The models have been predicted after suppliers were approached by Apple with their new plans. Apple has declined to comment.

The ‘phablet’ form factor (phones with a screen size between 5 and 6.9 inches) first gained traction  in the smartphone market around 2010, and despite early criticism that the size was both too large and too small to be accepted, global phablet revenues have been estimated as totalling $46 billion in 2013.

Quoted in Forbes, British telecoms researchers Visiongain have said that phablets will “consititue a significant portion of global smartphone shipments by 2018. They will become cornerstones around which the next-generation product lines of leading OEMs will be built.”

Apple still holds a clear majority market share in the sale of tablets despite slipping from 58.1% of the market in the first quarter of 2012 to 39.6% in 2013, but it has been overtaken by Samsung in the smartphone markets.

Speaking AllThingD’s D11 conference late last month technology analyst Mary Meeker showed how Samsung’s share of the global smartphone market had grown from just 4% in the first quarter of 2010 (compared to Apple’s 16%) to 29% in the fourth quarter of 2012, overtaking Apple who held 22% of the market.

Apple have previously stayed well away from the phablet market, with Steve Jobs declaring the iPhone’s original 3.5-inch screen “the perfect size for consumers”. The release of the iPhone 5 late last year was the first model to enlarge the screen size to a 4-inch, 16:9 ration.

As well as offering a phone with a larger screen, the iPhone rumours also included the possibility of a cheaper model, priced at $99. Although consumers have previously been willing to pay extra for the quality of Apple’s product, Samsung’s successes have proven that this is no longer the top priority.

Writing for Investor Place, Brad Moon has offered changes in the TV market as a parallel: “Sony used to pretty much own the premium TV market. But as other manufacturers who had once been mid-range or off-brand bargains caught up, consumers decided they were good enough that there was no point in paying extra for a Sony TV.”

Although the existence of Apple’s new models, both cheaper and larger, have not been confirmed by the company, they are certainly not impossible suggestions, especially considering the current disposition of the smartphone market

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