The Phab Factor

When it comes to technology, the banking industry spends a lot of time just trying to keep up. From the glut of function-specific applications arriving daily to new hardware like Google Glass, there’s always something new just around the corner, and every fresh entry has the potential to change everything.

But what if there was a new market already here that hasn’t been categorized as such? Would that offer some interesting possibilities?

Meet the phablet. Actually, you probably met it a while ago and carry it around all the time.

A bit of context here: The driving force behind Apple’s revolutionary iPad was to bridge the yawning chasm between the laptop and phone. The former—despite its designation as something we could carry around and perch on our knees—was entirely too big, while the later was just too small. (A few mini-notebooks attracted some attention but never really caught fire.) The tablet fit the bill perfectly and the touch-screen functionality, complete with keyboard, was the cherry on top.

But now, as avid consumers search for new modes of consumption, we want more (or less, depending on the device). That’s why we have the iPad mini, alongside smaller versions of non-Apple tablets. This is technically a new market, and users seem to grasp the concept—quite a few have bought one in addition to the regular-sized device they bought earlier. But what’s equally interesting, though perhaps less noticed, is that while tablets have gotten smaller, phones have gotten larger.

That brings us back to the phablet, which eliminates the apparent gap between phones and tablets. The category is loosely defined as devices with larger screens, but it’s not only about size. Some devices in this market feature software designed and/or customized for the phablet as a form factor. For example, the Samsung Galaxy Note touts a self-storing S Pen stylus for certain functions (which users with a memory might remember from earlier Palm devices).

It’s easy to make phun, sorry, fun, of the phablet. Even the word reeks of geekery run amok, a pointless portmanteau for an unnecessary category. (‘Superphone,’ a newer addition to the vocabulary, is even more groan-inducing.)  A recent piece on the subject in American Banker actually begins with the words, “They may look ridiculous, but. . .”

But that ‘but’ is important—despite the derision, this segment continues to spike at a staggering pace. The new report “Phablets and Superphones Market – Global Industry Analysis, Size, Share, Growth and Forecast, 2012 – 2018” predicts that the phablet (let’s just get used to saying it) market is growing at a compound annual growth rate (CAGR) of 44.1% from 2012 to 2018, reaching 825 million units and $116.4 billion.

This puts us in a strange place—here’s a market that’s already vast and will keep growing, yet there’s virtually no functionality customized specifically for it.

It’s easy to dismiss the notion of any real difference between smartphones and phablets, and this could be just another fad, of course. Still, there’s no question that a huge audience has emerged specifically for larger phones—a complete reversal of long-held beliefs that we like our phones to be as small and light as possible. And just to be practical, the phablet will fit into clothes in a way the tablet won’t.

So here’s how this will play out. The phablet will remain what it is, a phone with a larger screen that eases multimedia functions. Alternatively, it will become a specific hardware category, thanks in part to innovators who can thread the needle and develop apps and capabilities that dovetail perfectly with this form factor. Those individuals and the organizations that back them will reap the rewards. The rest of us will wonder why we didn’t think of that.

Mobile banking is literally in its infancy—it didn’t even exist just a few years ago. Today, facing frantic competition, every financial services institution is pouring resources into the field, with dazzling apps that can function on every kind of platform. Staying ahead of the curve for once might make for a healthy change.

Written by Staff