Apple’s new earnings report shows that big phones are displacing tablets

We're used to thinking of smartphones and tablets as separate product categories. The first iPhone was small — its screen measured 3.5 inches diagonally. The original iPad was big — its screen was almost 10 inches.

But it's becoming clear that for many customers, the "sweet spot" for a touchscreen mobile device is somewhere in the middle. More evidence for this can be found in Apple's latest financial results.

On the one hand, iPads continued their two-year-long decline. Between April...

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