While Apple tries to break the wearables market open in a way that earlier entries from competitors have not, the new iPhones it introduced on Tuesday put Apple squarely in the position of chasing the market. Bigger phones are increasingly popular, particularly in Asia, where consumers often have one internet-connected device. “Phablets” — tablet-esque phones with screens between five and seven inches, such as Samsung’s Note — will record shipment growth of 209.6% in 2014, according to IDC. By next year, the research firm predicts phablets will outsell PCs; by 2016, they’ll surpass tablets.
Although Apple has seen steady growth in rising markets like China, it is facing new challengers abroad. IDC estimates that Apple ships 11.7% of smartphones worldwide, a 1.3% drop from last year, as both Apple and market leader Samsung saw rising competition from Chinese manufacturers Huawei and Lenovo.
Apple’s share is climbing at home, reaching 42.4% of the U.S. market as of July, according to ComScore. The research firm also estimates that more than a third of current iPhone owners are ready to upgrade devices, a pent-up demand that could bloat Apple’s balance sheets.
However, Apple will need to contend with a changed telecom landscape, as the main U.S. wireless carriers have shed the subsidy plans that bolstered earlier iPhone sales. The carriers are also partnering more closely with smaller handset-makers, in a bid to loosen the controls of Apple and Samsung.
Many had been waiting eagerly for Apple to get into the NFC payment game, which they hope would spur widespread use.
Google introduced its mobile wallet in 2011, and several of its Android smartphones include NFC chips. Three of the top carriers — AT&T, Verizon and T-Mobile — teamed for their own payment system, formerly called Isis Wallets. (It has rebranded to Softcard, given recent events.) But without Apple, and nearly half the U.S. smartphones, adoption has failed to take off.
Proximity payments totaled $1.6 billion in 2013, a 114.5% annual increase, according to eMarketer. Yet only 8% of smartphone users made one of the transactions.