For over 2-and-a-half years, Apple has watched the smartphone competition grow taller and wider and it eventually capitulated on a taller iPhone size with the latest iPhone 5. But it is still way behind when it comes to providing total screen real-estate when compared to a Samsung Galaxy S3 or Note 2.

I’ve argued repeatedly that the company needs a wider phone and that market forces will damage Apple in the long-run as many form factors will be developed and some will be hits. The point was that in the eighties we saw vibrant PC competition destroy Apple’s price/performance position. Now, virtually limitless screen-size options allows consumers to determine which size is best for them.

Interestingly the iPad Mini was a device Apple never wanted to make and once produced, became an instant hit causing Matt Baxter-Reynolds at ZDNet to declare this size the new form factor for tablets.

While I won’t go that far, it is worth noting this handheld tablet – a response to competition from Google, Amazon and others, marks a turning point – the one I warned the company about, from Apple controlling the conversation to following the pack.

Android is a blatant iOS knock-off with some clever additions –the interface Apple popularized with the iPhone was unseen before Cupertino launched it. But with so many screen sizes to choose from, Apple is now in the position I warned about and the company has made the same mistake from the eighties many witnessed it make.

My premise was that just as vibrant competition from the likes of Gateway, Dell and a zillion other clone makers drove the cost of PC-based computing down dramatically making Apple less competitive, a slew of different form factors would be unanswered by Apple and subsequently cost them marketshare.

Its worth pointing out that Samsung has been able to keep up in the form factor wars and in many cases has started them and is winning them.

The immediate challenge Apple faces today is to come out with a phone which competes with both aforementioned Samsung devices. Perhaps a 5-inch screen would be the best way to achieve this. There are finally rumors floating around that Apple will launch such a device and interestingly it seems the Apple rumors have gotten more accurate after the passing of Steve Jobs. Moreover, production cut news could be confirmation that such a device is coming soon.

Let’s face it, Apple is happy to make large margins and sacrifice marketshare for increased profit. But with a 5-inch device they likely can have their cake and eat it too. After all, we are talking about a $135B market in 2015! Sure, the screen may have to be less bright and the device may have to be thicker so as to include a powerful battery. But as iPhone 5 users know, the battery life of this gadget isn’t anything special. It’s not like Apple users aren’t used to lugging extra cords and batteries with them to just about any place they go.

Hopefully 2013 is the year of the 5-inch Apple phone – this size device may be just phablety enough to satisfy the market.