Why do phablets cost so much more than tablets?

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We live in a day and age where people just aren’t satisfied with having a smartphone or a tablet — or both. Instead, many seem to want some unholy combination of the two: a phone that’s too big to be considered a phone, but a tablet that’s too small to be considered a tablet. This Frankensteinian creation has a name: the phablet. I didn’t say it was a pretty name, but it’s a fitting one nonetheless. Once you get your head around the fact that such a beast exists, that there is a market for it, and people actually enjoy their phablets, one aching question remains: why do phablets cost so much more than tablets?

Smartphones

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A smartphone has a central processor, graphics processor, RAM, storage, battery, charging circuitry, and a screen that measures up to 5-inches — give or take. These devices use an operating system and can run apps that you download from the Play Store. They also include various cellular radios, amplifiers, and antennae through which the device can connect to any number of various cellular voice and data solutions provided by any number of carriers.

Smartphones cost anywhere from US$179 to over $600, depending on features and markup.

All that sounds pretty much like you might expect, right?

Tablets

nexus-7

A tablet has a central processor, graphics processor, RAM, storage, battery, charging circuitry, and a screen that measures 7- to 12-inches. These devices use an operating system and can run apps that you download from the Play Store. They might also include various cellular radios, amplifiers, and antennae through which the device can connect to any number of various cellular data solutions provided by any number of carriers, though this feature generally adds another $50 to $80 to the price.

Decent tablets cost anywhere from US$299 to over $600, depending on features and markup.

This, too, sounds pretty much like you might expect, right?

Phablets

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A phablet has a central processor, graphics processor, RAM, storage, battery, charging circuitry, and a screen that is usually somewhere in the 6-inch range, but is usually always less than 7-inches. These devices use an operating system and can run apps that you download from the Play Store.  They also include various cellular radios, amplifiers, and antennae through which the device can connect to any number of various cellular voice and data solutions provided by any number of carriers.

So far, they sound like smartphones, just with a bigger screen, and very probably a larger battery. As such, you might expect them to cost a bit more than a typical smartphone.

When we compare phablet prices to tablet prices, there seems to be a huge difference. Phablets typically command at least a few hundred dollar premium over tablets — but phablets have smaller screens and smaller batteries than tablets, so they should cost less than tablets, right?

They don’t.

Why do phablets cost so much more than tablets?

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There are two parts to this answer.

First, phablets contain all the extra cellular voice and data electronics that are needed to make and receive phone calls, as well as access to who knows how many different types of cellular data. All that extra “stuff” comes with a cost premium, so you’d expect the price to increase a bit.

What about cellular-enabled tablets like the LTE Nexus 7? Some tablets do include cellular data capabilities, whether that’s using LTE or HSPA+. While these devices do include extra radios, amps, and antennae to enable them to connect to cellular data networks, they still don’t include anything to make them work with cellular voice networks. There’s where part of the price discrepancy comes in to play.

The second half is where the costs are really hidden. Most phablets are sponsored by one carrier or another. As such they have to go through a vetting and certification process before a carrier allows them on their network. This cost is passed along to you, the customer. Additionally, since these are typically carrier devices, they have a carrier markup tacked on to them as well. Carriers want to make money, and one way they can do so by selling you a heavily marked up device.

OEMs can’t offer these devices directly to consumers at prices that would undercut their partners (the carriers), so they keep their margins high as well.

Phablets should cost a little more than tablets due to their extra cellular goodies tucked neatly inside them, but they should cost less than equally spec’d tablets due to their smaller screens and batteries. In a perfect world these two would wash, and phablets should be priced about the same as tablets with the same specs (processor, RAM, and storage).

Due to demand and carrier “complications”, the prices for phablets are much, much higher — not because they should be, but because carriers and OEMs can charge their premiums and people will pay. They’re new. They’re novel. They’re in demand. All of those mean that prices can be higher than one might expect when comparing them to tablets that are almost the same.

Is it fair? No, but it does follow the laws of supply and demand — with a little carrier complication thrown in, just to make things interesting.

Image credits: Google, HTC, Breaking Bad

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About The Author
Joe Levi
Joe graduated from Weber State University with two degrees in Information Systems and Technologies. He has carried mobile devices with him for more than a decade, including Apple's Newton, Microsoft's Handheld and Palm Sized PCs, and is Pocketnow's "Android Guy".By day you'll find Joe coding web pages, tweaking for SEO, and leveraging social media to spread the word. By night you'll probably find him writing technology and "prepping" articles, as well as shooting video.Read more about Joe Levi here.