Apple Inc. is testing larger screens for its smartphones and tablets as it attempts to answer increasing concerns about its product lineup and competition from Samsung Electronics
People at Apple's suppliers said it asked for prototype smartphone screens larger than its current iPhone in recent months, and has asked for screen designs for a new tablet measuring slightly less than 13 inches. Whether the designs will make their way to market is unclear, but they could lead to Apple phones and tablets that are larger than the current 4-inch iPhone 5 and 9.7-inch iPad.
An Apple spokeswoman declined to comment. Reuters earlier reported Apple was investigating larger screen sizes for its iPhone.
The screen tests come as Apple is set to disclose third fiscal-quarter earnings on Tuesday and provide insight into how the company's existing lineup is selling. In April, the Cupertino, Calif., company reported profits contracted for the first time in a decade despite strong demand for the iPhone and iPad.
The challenge Apple faces is how to continue expanding its customer base with innovative new products and refinements of current ones. Apple has successfully done both, but analysts note the company hasn't launched a new product line since the original iPad in 2010.
The tests with suppliers suggest that Apple is exploring ways to capture customer interest in smartphones and tablets from competitors that come in various sizes. Its biggest rival in the tablet and smartphone markets, South Korea's Samsung, offers products with different features and sizes in what its executives say is an effort to appeal to as many customers as possible. The products have allowed Samsung to become the world's largest smartphone maker, even though Apple still leads in tablets.
"Apple has been slow to react to consumer desire for larger smartphone screens, [and] entry level price points on new phones," said BGC Financial's Colin Gillis in an investor note. "Waiting and waiting, for the new products to launch, has become painful," he wrote.
Apple routinely tests different designs for its products as it refines them during development. The company also changed its iPhone and iPod offerings last year to include larger screens, while adding a "mini" variant of the iPad with a 7.9-inch screen.
A spate of miss over new mapping technology, higher than expected popularity of older-model iPhones and increasing competition have heightened investor fears and weighed on its shares, which are down 39% from a high above $700 last September. Apple shares gained $1.36 to $426.31 in New York on Monday.
As the smartphone market has begun to mature, Samsung's Galaxy line of smartphones and tablets has emerged as one of Apple's toughest competitors. Samsung was the leading smartphone maker with 33.1% of the market in the first quarter, while Apple trailed in second place, with 17.9%, according to researcher Strategy Analytics. In tablets, Apple is still the dominant player, but its market share fell to 39.6% in first quarter from 58.1% a year earlier, according to researcher International Data Corp. Samsung, which uses Google Inc.'s Android operating system, grabbed 17.9% of the tablet market, up from 11.3% a year earlier.
"In the long run, we will see touch screens in all sizes as the future vision of the technology industry is to offer the same user experience across all screens," said IDC analyst Helen Chiang. "The key is to bring down the cost and introduce compelling applications for large-screen devices."
Apple's move, if adopted, would fit into a broader trend among mobile-device makers. Competitors including Samsung, Sony Corp. 6758.TO +3.42%and Huawei Technologies Co. have launched smartphones with displays larger than 5 inches, a category sometimes called "phablets" because devices overlap a phone and tablet
Apple and its suppliers are preparing to ramp production of a new iPad in coming weeks, according to people at component suppliers. The new version is expected to be the same size and have the same resolution as the existing 9.7-inch model, they said. It would have a lighter display that integrates touch sensors with a thin film instead of the glass used in existing iPads.
Suppliers started producing large quantities of components for the new iPhone last month, people at suppliers said. One person said Apple told Hon Hai Precision Industry Co., which manufactures many of Apple's products, to be ready to ship the new iPhones in late August.
That iPhone is likely to be introduced in the second half of the year and will be the same size and have a similar screen to the iPhone 5. Apple also has been working with its manufacturing partners in Asia on a less expensive iPhone without its signature metal casing. Both iPhone models would have multiple color options, people at suppliers said.
Adopted from wsj
