Bigger screens are better is a stretch. This is selling less than either the iPhone or the S3 both of which have smaller screens. While someone somewhere will

Bigger screens are better is a stretch. This is selling less than either the iPhone or the S3 both of which have smaller screens. While someone somewhere will buy a phone with pretty much any screen size you can name, there are going to be demand peaks around certain sizes. Where those are will take a few years with more choice to become clear, but the fact that the S3 out sells the Note (both well reviewed, similarly functional, same manufacturer so otherwise pretty comparable) suggests pretty strongly that demand for "phone" sizes is still greater than "phablet" sizes. And I think Apple get that choice is good - the iPad Mini is a very direct representation of that, ditto the fact that there are now three different iPhones. They're not throwing out phones the way Samsung are because there are other trade offs in doing that, but I think they get that not everyone wants the same thing.