Larger iPhone 6 Screens Set to Impact the Mobile Landscape

Amid much buzz last week, Apple announced two new iPhone models. The biggest departure from the current iPhone family is the screen size, ushering Apple’s entry into the “phablet” market. Whereas the current iPhone 5 offerings have a 4 inch diagonal screen measurement, the iPhone 6 clocks in at 4.7 inches, and the iPhone 6 Plus at a massive 5.5 inches. It may not sound large at first, but those measurements increase the screen size from the current generation by 17.5% and 37.5% respectively.

 At Localytics, we were curious to see how the new screen sizes will impact the mobile landscape and market as a whole. Naturally, as a marketing and analytics company, we took a data-centric approach to the analysis and found that:

  • Users with large-screen phone models come back to a mobile app 38% more often and stay in-app 10% longer
  • 6.6% of all users are active across both phone and tablet devices, however the proportion drops to only 1.5% for users with large-screen phone models, indicating a possible sales decline for 7" tablets
  • Certain countries, particularly developed Asian countries, lean towards the larger screen phones, and may be the quickest adopters of the iPhone 6/6 Plus
  • US cities with a longer commute and/or a high proportion of knowledge workers tend to prefer larger screen sizes

 

How Does User Engagement Differ by Screen Size?

To answer this question, we wanted to measure not only user demographics, but behavioral data around screen sizes. To do this, we measured session frequency and session length for users with large-screen devices against all other mobile users. We found that users with large-screen phone models come back to a mobile app 38% more often and stay in-app 10% longer. One can hypothesize that larger screen sizes create a more engaging experience for users because they can do more with their apps in terms of functions and features and they can do it more easily, which results in a more positive user experience.

Overall, this is great news for app publishers in preparation for the coming influx of new iPhone 6 users equipped with shiny new 4.7 and 5.5 inch screens. 

 

Do We Need Tablets Anymore?

While the data indicates that users enjoy large screen devices, the question arises, how many screens can a user manage? Soon we will have an Apple Watch, three different iPods, several iPhone choices, iPad Minis, iPads, MacBooks, iMacs, and an Apple TV. A few media outlets have attempted to speculate on the topic, but let’s again take a look at the data.

In analyzing close to half a billion tablet sessions over the last 30 days, we found that 6.6% of users are active across both phone and tablet devices, while the proportion is only 1.5% for users with large-screen phones. Granted this isn’t a perfect predictor of purchasing behavior, it nonetheless indicates that users owning large-screen devices use tablets significantly less often.

According to estimates by Piper Jaffray and UBS market analysts respectively, 50+ million iPhone 6 devices will be in users' hands by the end of Q4 2014 and we could see 20+ million Apple Watch sales in FY 2015. The resultant increase in large-screen device market share combined with a larger portion of the consumer discretionary electronics budget spent on the watch category will put downward pressure on tablet sales. Similarly, iPad 3 adoption has been slow, as indicated by our findings showing that the iPad 2 is still the dominant tablet. This will likely be especially apparent in the smaller iPad Mini. Evercore analyst Rob Cihra estimates a 2% year-on-year sales decline for the iPad Mini in FY 2015. Based on our analysis, however, we could expect 2015 iPad Mini sales to decline even faster than previously anticipated if the iPhone 6 launch is indeed a record performance, as early pre-order numbers are signifying. 

 

Large-Screen Device Preference Stronger in Certain Countries and Regions

On the whole, we found a strong positive correlation between the proportion of large-screen device usage and the following country-specific data points:
  • Large proportion of Internet users
  • High oil consumption/imports
  • Developed infrastructure (length of roadways/railways and number of airports)
  • Length of oil pipelines

(Source - CIA World Factbook and Localytics data)

This leads to the conclusion that users in more heavily industrialized countries tend to prefer larger screen sizes. This is not entirely surprising given it’s likely because users can afford larger, often higher priced, phones and technology likely plays a larger role in people’s lives in these areas.

In the heatmap below, we see which countries and regions generally prefer larger screens, notably North America, the Middle East / Gulf States, and developed Asian countries.


Heatmap of Large-Screen Preference by Country

heatmap-large-screen-users-by-country

 

Near the bottom of the list, we find several South American and CIS countries, where limited purchasing power leads to a preference for cheaper, smaller-screen Android devices. In Apple-dominated Japan users also have smaller devices, although this will likely change as they adopt the iPhone 6 readily regardless of the larger screen size.

Screen_Shot_2014-09-15_at_12.12.59_PM


Which US Cities Will Adopt the iPhone 6 First and Why?

In determining which specific areas in the United States will adopt the iPhone 6 most readily, we went back to the data. We found that metro areas where workers have a longer mean commute time significantly prefer large-screen devices. This makes sense, given that users will often browse using their devices during a long commute. Larger, more spread out cities in the West with longer commute times tend to have a greater preference for large-screen devices. And yes, everything is indeed bigger in Texas. Similarly, metro areas with a high proportion of knowledge workers prefer larger devices.

Our model predicts that the following five metro areas will adopt the iPhone 6 most quickly, based on current iPhone users per capita, preference for large-screen devices, knowledge worker ratio and mean commute time:

  Percentage of Large-Screen Users by US Metro
  • Los Angeles

  • New York

  • Chicago

  • Dallas-Ft. Worth

  • Houston

heatmap-large-screens-by-city

 

Stay Tuned!

Apple’s recent announcement confirmed what many of us believed, that the mobile landscape will change with the iPhone 6. We’ll likely see even greater app engagement as users spend more time with apps and launch them more frequently. It may also be the case that tablet sales decline significantly with the advent of Apple’s new ‘phablet’. Finally, we’ve seen strong country preferences for larger sized phones which should act as an indicator of where the strongest iPhone 6 sales will come from starting next week.

I’ll be back soon discussing the Apple announcement on which app categories are most impacted by the larger screen sizes, the new health and fitness functionality in iOS 8, and how to optimize your app for the iPhone 6.

Methodology

Localytics is the leading marketing and analytics platform for mobile and web apps across more than 1.5 billion devices and 28,000 apps. Localytics processes 50 billion data points monthly. For this report, we looked at all devices seen in the last 30 days with a screen size of 4.7” or larger and compared them to smaller devices on several metrics including session frequency, session length, country, US metro area and connection to a tablet device. We correlated this data with country data from the CIA World Factbook and metro data from the US Census Bureau’s American Community Survey.

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