Phablets aren't going to kill tablets or smartphones but they will be a viable niche product, said Sascha Segan, lead mobile analyst for PC Magazine.
There's only one major phablet currently available, the Samsung Galaxy Note with its 13.5-centimetre touchscreen. It looks huge beside the 8.9-centimetre iPhone but is considerably smaller than 17.8-centimetre tablets like Research in Motion's (TSX:RIM) BlackBerry PlayBook and the 24.6-centimetre iPad. LG has also revealed plans to release a phablet, the Optimus Vu.
"Most phablets look like you are holding a slice of bread up to your head, or some other similarly awkward object," Segan said from New York.
But as consumers make fewer phone calls, size isn't expected to matter.
"People who find themselves occasionally making voice calls or are comfortable making all of their calls with a Bluetooth headset can say, 'I want a bigger window on the Internet and I am never going to hold this thing to my head,'" Segan said.
"They'll start dropping their smartphones and pick up these phablets as Internet-centric devices rather than phone-call centric devices."
Tech trends firm ABI Research predicts more than 208 million of these hybrid devices will be shipped by 2015.
The lines are beginning to blur between smartphones and smaller tablets, said ABI's senior analyst Joshua Flood, who's based in London.
"Essentially, this is going to be eating up on the smaller tablets market," he said. "People are using it predominantly with web browsing, applications or gaming."
Flood noted a number of smartphones with screen sizes greater than 11 centimetres will be released this year and could be considered phablets. So far, in addition to the Galaxy Note, the Samsung Galaxy Nexus, Galaxy S3, HTC One X, LG Optimus 4X HD, Huawei Ascend D1 and Sony Xperia have been released, he said.
He expects iPhone and iPad maker Apple will release a phablet by 2013.
A couple of years ago, Dell released a phablet called the Streak, which hit the market in the United Kingdom with a lot of buzz but never connected with consumers.
Samsung has had better luck with the Note and says it has shipped seven million of the devices since its launch early this year.
However, phablets aren't seen as a threat to Apple's market-leading iPad.
"The iPad competes with laptops," Segan said.
Segan said smaller tablets are for people who want to be able to carry them around but feel "cramped" on a smartphone, which is the same pitch for phablets.
"So the potential phablet owners could have a phablet and maybe even a little flip phone."