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Inside India’s Phablet Revolution

In India, bigger is better when it comes to mobile phones, but Apple is lagging behind competitors like Samsung and Xiaomi.

Zanish Khan runs a tiny shop in Delhi’s Basrurkar Market, where India’s middle class comes to buy life’s essentials. All around him, other merchants offer everything from electric fans to dried lentils that shoppers can scoop from 100-pound burlap bags. By contrast, Khan’s merchandise is kept under glass and packed with state-of-the-art electronics.

illustrated little dude rocking out to his phablet old school style

Still, Khan fits right in. India is in the midst of a smartphone buying binge, and Khan specializes in the oversized phone/tablet hybrids—or phablets—that enjoy great popularity in his country. His cases are stocked with models such as the Samsung Galaxy A5 and Grand 2, whose screens measure five inches diagonally. If that’s not big enough, the Galaxy E7’s screen stretches 5.5 inches. He hardly bothers stocking any phones with traditional, smaller screens of 4.5 inches or less.

Across Asia, smartphone buyers have decided that bigger is better. Market researchers at Flurry Analytics recently reported that 50 percent of smartphone sales in Taiwan and Hong Kong involve devices with screen sizes of five inches or more, versus a 20 percent share worldwide. A comparable study last year by Netbiscuits put India’s phablet share at 29 percent. In Japan, Sony’s biggest smartphone launches lately have involved phablets, while South Korea has been dubbed “the land of the phablet.”

For Indian consumers with limited means, buying a phablet is a way of joining the digital era with a single purchase, says Anand Chandrasekaran, chief product officer at Snapdeal, a major Indian e-commerce company. “People may not be able to afford a laptop or a desktop computer,” he observes. But if they buy a phablet, he explains, “they can have full and easy access to the Web, and a phone as well.”

India’s cab drivers like phablets because their larger screens display easy-to-read maps that can help with directions to unfamiliar destinations. Shopkeepers use phablets as a way of tracking inventory and sales while moving about. Students press phablets into duty as game consoles, e-book readers, or movie players. The devices’ large size makes them a bit awkward to use as phones, but devotees don’t seem to mind.

Overall, India is the fastest-growing smartphone market in Asia, with purchases running at a rate of more than 80 million a year. Cisco Systems, the U.S. network-equipment maker, recently predicted that Indians could own 651 million smartphones by 2019, up from 140 million last year. That’s a boon for leading handset makers such as Samsung, China’s Xiaomi, and India’s own Micromax and Karbonn.

To date, Apple has won only a 2 percent market share in India. Local regulations make it impossible for Apple to set up its own sleek stores there, so it must sell through existing channels. Its most sophisticated offerings—such as the iPhone 6 Plus phablet—carry list prices approaching $1,000 in India, putting them beyond most buyers’ budgets. Apple offers its older iPhone 4 at about $300, a strategy that’s brought mixed results. Some shoppers are thrilled to own anything made by Apple; others grumble about missing out on the newest designs.

But budget-minded customers have plenty of alternatives. Xiaomi made heads turn in January, when it launched its Mi Note phablet in India. It offered the device, with a 5.7-inch screen, for about $370. The initial allotment of Mi Notes sold out in three minutes online, having attracted 220 million pre-orders. Some would-be customers filled out dozens of order requests in hopes that at least one would be fulfilled.

Another popular Xiaomi offering in India, the Mi Redmi Note 4G, with a 5.5-inch display, was available in May in the affluent Delhi suburb of Gurgaon for 9,999 rupees, or about $158. “It’s a hot-selling model,” said Ajendra Sahay, a senior salesman at the Mobile Store. “It’s popular with both men and women. The teenagers are very much attracted to it.” Sahay added that he started May with 2,000 of the phones; by May 21, 80 percent of them had already been sold.

Like many Xiaomi phones, the Mi Redmi Note 4G offers middle-of-the-pack performance at stunningly low prices. The phone uses the Android 4.4 KitKat operating system. It provides the standard front- and back-facing cameras, with 13-megapixel capability on the first and five megapixels on the second. It runs on a 1.6-gigahertz Qualcomm Snapdragon processor.

Xiaomi has been caught up in a patent dispute that has slightly curtailed its access to the Indian market. Sweden’s LM Ericsson contends that some Xiaomi phones violate its patents, and while India’s courts sort out those claims, Xiaomi hasn’t been able to sell those handsets in India. Meanwhile, Xiaomi is rapidly pressing ahead with a variety of models using Qualcomm chipsets.

Indian customers don’t seem flustered by such disputes. On the Flipkart e-commerce site, the Mi Redmi Note 4G phone is one of the most popular, attracting a 4.1 average rating (out of a possible 5) based on more than 12,000 customers’ responses. The review getting the most attention comes from someone identified as “Harikumar R,” who describes stress-testing the phone by accessing WhatsApp for 13 hours while also playing Candy Crush for an hour, chatting on the phone for 55 minutes, checking Facebook periodically, and reading newspapers online.

The reviewer’s conclusion: “Excellent for a common man.”

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