2-in-1s set to dominate Australian tablet sales

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SYDNEY, AUSTRALIA – The Australian tablet market continued to transition towards 2-in-1s or computers that can either function as a slate or traditional laptop form factor, according to new research from Australian emerging technology analyst firm, Telsyte. 

 The Telsyte Tablet Computer Market Study 2019-2023 found some 1.44 million tablets were sold in the first half of 2019, down 2 per cent from the first half of 2018. Apple remained the leader in tablet sales share (iOS 53.4%, Windows 27.4%, Android 17.6%, and others: 1.6%) with sales of Apple and Windows-based tablets both increasing (5% and 3% respectively) in the first half of 2019 due to iPad mini upgrades and growing demand for 2-in-1s. Sales of Android tablets were down 28 per cent over the same period.

 The top three vendors during the period remained Apple, Samsung and Microsoft.

Sales of the smaller 8-inch tablet form factor saw a “mini boom” in the first half of the year (up 16% from 1H18) due to the release of 2019 iPad mini, which was last released in September 2015.

On the other end of the spectrum, interest in high-end 2-in-1s has increased the average cost of tablets by 17 per cent (to over $800) from a year ago.

According to the Telsyte, the overall tablet computer category will likely experience modest demand in the second half of 2019 through to 2020.

Telsyte forecasts around 1.5 million tablets will be sold in the second half, a decrease of 5 per cent on the same period last year. Telsyte expects similar trends to continue into 2020 due to prolonging replacement cycles, and other devices such as 5G smartphones and wearables taking a greater share of consumer electronics spending.

Versatile 2-in-1s cement their place

The 2-in-1 category is expected to continue growing as manufacturers position their products as replacements for PCs and focus on the business and education sectors.

Telsyte found nearly 4 million (3.9M) Australians are now using a 2-in-1. While Windows still dominates with 65 per cent share, Telsyte expects the share of 2-in-1 iPads to increase with the expanded range of new iPads which support Apple’s ‘Smart Keyboard’.

Furthermore, the new iPadOS brings iPad closer to a complete “PC-Like experience”, with better multitasking and external hardware and network support features.

“The slate-only format is rapidly being replaced by 2-in-1s as Australians seek to replace older laptops and tablets with converged touchscreen devices with keyboards,” Telsyte Senior Analyst, Alvin Lee says.

The replacement period of slate-only tablets (non 2-in-1s) has increased close to 20 per cent in the last 12 months to 3.2 years, compared to 2.6 years for 2-in-1s, according to Telsyte’s research.

Apple remains the leader in repeat purchase intentions, followed by Samsung and Microsoft (Greater than 85%, 75% and 60% respectively).

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High-speed connectivity to drive tablet sales

 The continued improvement of wireless connectivity, such as 5G, Wi-Fi 6 and eSIMs, are expected to drive future tablet upgrades.

Currently there are around 10 tablets and 2-in-1s with eSIM support from manufacturers such as Apple, HP, Lenovo, Microsoft and Samsung. Telsyte anticipates this will increase substantially over the next 24 months.

 Telsyte’s research found around 1 in 6 tablets purchased were through carrier channels and just over two million tablets are connected to mobile networks.

 “Mobile connected 2-in-1s are ripe for growth in the coming years as carriers look to increase network utilisation beyond smartphones”, says Lee.

 According to Telsyte’s latest research, 2 in 5 Australians are interested in connecting their tablets to mobile networks especially if it can be connected using a mobile data sharing plan (46%).

 Smart displays replacing docked tablets in Australian homes

 Australian households are seeing an expanding range of smart speakers and smart displays (speakers with screens) available through retail channels.

 Telsyte estimates that 1 in 5 Australian households are now using at least one smart speaker at the beginning of July 2019, up from 16 per cent in December 2018.

 Among these, close to 10 per cent are now using smart displays, such as the Google Home Hub, Amazon Echo Show and the Lenovo Smart Display.

 The smart display installed base has doubled from six months ago. The smart screen category is beginning to converge with a growing interest in smart homes and demand for visual displays that support voice commands.

 “The popular smart display category gives tablet vendors the opportunity to tap into the fast growing IoT@Home (smart home) market that was already worth over a billion dollars in 2018”, says Lee.

For further information on the study or media enquiries contact:

 Foad Fadaghi
Managing Director
Tel: +61 2 9235 5851
Email: ffadaghi@telsyte.com.au

 Alvin Lee
Senior Analyst
Tel: +61 2 9235 5890
Email: alee@telsyte.com.au

 The Telsyte Tablet Computer Market Study 2019-2023 is a comprehensive study which provides subscribers with:

  • Market sizing, platform and vendor market shares and forecasts

  • End user trends across devices, application usage, platforms, channels and accessories

  • Tablet and computer purchase intentions and loyalty

  • Tablet audience estimates

  • Strategic analysis of market trends and issues

In preparing this study, Telsyte used:

  • Telsyte’s mid-year consumer survey conducted in July 2019 with a representative sample of 1,026 respondents, 16 years and older.

  • An online survey conducted in November and December 2018 with a representative sample of 1,025 respondents, 16 years and older.

  • Interviews conducted with executives from manufacturers, service providers, network operators, retailers, financial analysts and channel partners.

  • Financial reports released by service providers and manufacturers.

  • On-going monitoring of local and global market and vendor trends.

  • Analyst reviews of leading tablet devices.

Editor’s note:

 Tablet definition:  A computer device consisting of a 7 inch or larger touch screen that can be used in a slate format (not requiring keyboard or mouse). Telsyte’s definitions includes 2-in-1 devices with detachable or foldable keyboard, and tabletop, or reclinable desktop screens that provide a tablet form factor experience.

 2-in-1 definition: Primarily refers to laptops that have a touch screen and detachable keyboards or foldable form factors to provide a pure tablet-like experience. Tablets that are known for their versatility and mimic laptop-like experience with keyboards or type covers are also considered as 2-in-1s. E.g. Microsoft Surface tablets, iPad Pro, Samsung Galaxy Book, HP Spectre x360, Asus Chromebook Flip 2, or Lenovo Yoga 730.

 Please note Telsyte measures Apple iPad models that support the specifically designed Apple Smart Keyboard (typically sold together) as 2-in-1s for comparison reasons. This include the iPad Pro series, iPad Air 3rd gen (released in March 2019) and iPad 7th generation (released in September 2019). 

 Telsyte measures sales of devices (“sell out”), not shipments or sales to retailers or carriers (sometimes called “sell-in”). Telsyte believes this is a more accurate measure of performance of products in a marketplace. Telsyte does not rely on disclosure from vendors or general assumptions made for large multinational companies that do not release local market data. Telsyte uses a comprehensive methodology that includes surveys of consumers, discussions with vendors, carriers and their partners, retailers, and financial analysts. In addition, public financial results from manufacturers and carriers are used.  Telsyte tests a wide range of products in real life usage scenarios and conducts satisfaction and repeat purchase surveys with large and representative samples of Australian smart device users. Telsyte is a pioneer in measuring and reporting smart device sales in Australia and has been providing insights on mobile technologies since 2006.

 About Telsyte

Telsyte is Australia’s leading emerging technology analyst firm. Telsyte analysts deliver market research, insights and advisory into enterprise and consumer technologies. Telsyte is an independent business unit of DXC.technology. For more information visit www.telsyte.com.au

 The material in this article is copyright protected and not intended to be altered, copied, distributed or used for any commercial or non-commercial purpose, except for news reporting, comment, criticism, teaching and scholarship.

Australian consumers turning to smartwatches as smartphone sales slows

Lack of 5G in 2019 iPhones will impact market in 2019

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SYDNEY, AUSTRALIA – High-speed 5G capability is now important for more than 1 in 3 Australians when choosing a smartphone, and the percentage surges to around 60 per cent amongst those planning to purchase a smartphone before the end of 2020, making it critical for upgraders, according to new research from Australian emerging technology analyst firm, Telsyte.

The Telsyte Australian Smartphone & Wearable Devices Market Study 2019-2023 found just over 4 million smartphones were sold in the first half of 2019, down 6 per cent compared to the same period a year ago. The slowdown was mainly due to a prolonging iPhone replacement cycle and anticipation of greater availability of 5G smartphones in the second half of 2019 and through to 2020.

The study found amongst those that purchased their smartphones outright, the average replacement cycle is now almost 3 years, with iPhones having a 25 per cent longer replacement cycle compared to Android.

The ability to maintain newer operating systems on older handsets has seen iPhones average replacement cycle increase by 30 per cent to around 3.2 years. Android replacement cycles also increased by 11 per cent during this period, to around 2.6 years.

Sales of iPhones declined by 13 per cent during the measured 6 months to 1.7M while Android sales remained stable at 2.3M.

Apple remained the top vendor overall and the top three Android vendors during the measured period remained Samsung, OPPO and Huawei. Sales of Android was driven by increasing demand of mid-range smartphones and bundles (e.g. with a smart speaker or with a smartwatch).

Telsyte research also shows that 1 in 5 (20%) Australian households at the beginning of July 2019 had at least one smart speaker, up from 16 per cent in December 2018.

Despite declining iPhone sales in 1H19, Apple maintained the highest repeat purchase rate (greater than 90%). Samsung and OPPO’s brand loyalty (measured by repeat purchase rates) have both increased and are leading amongst Android smartphone vendors.

It is worth noting OPPO improved the most, jumping from 6th to 3rd overall in terms of repeat purchase intention rates, as the vendor continued to hold its position in the tightly contested Android market.

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Consumers wait for 5G

5G mobile technology is being rolled out across Australia, promising speeds up to 1Gbps and beyond. Many consumers are aware of this and are making purchasing decision based on the availability of this technology, both to “future-proof” and maintain resale value. The lack of 5G support is likely to impact the demand for iPhones in next 12 months.

However, Telsyte believes the arrival of a 5G iPhone model in 2020 could re-ignite the market.

Telsyte anticipates at least one iPhone model to be released in 2020 that will support 5G.

With a large selection of 5G smartphones expected in 2020, annual sales of smartphones could potentially reach the peak levels last seen in 2017 where over 9 million smartphones were sold in Australia.

“All the evidence is suggesting that we are set for a super cycle in 2020 as consumers replace aging 4G handsets”, says Telsyte Managing Director, Foad Fadaghi.

In the interim, Telsyte believes delayed smartphone purchasing has created a window of opportunity for smart wrist wearables.

Wearables driving a better digital experience

Australians have a growing appetite for wearable technology with a total of 1.2M smart wrist wearables sold in 1H19, up 22 per cent from 1 million a year ago, mainly driven by increasing demand for smartwatches.

Some 69 per cent of smart wrist wearables sold during the measured 6 months were smartwatches (830,000).

Apple remained the clear leader in the smartwatch market with close to half (48%) of total smartwatch sales during the six-month period. Other main smartwatch vendors included Samsung, Fitbit, Huawei and Garmin, with all enjoying healthy growth.

As is the case with iPhones, Telsyte’s latest survey recorded a high satisfaction amongst Apple Watch users. Apple Watch had a higher than 90 per cent repeat purchase intention rate.

Telsyte’s research shows the increasing demand for smartwatches has been driven by improved battery life, voice commands, health monitoring and better designed smartwatch apps.

Less than half of existing smart fitness band users plan to buy another one, compared to 85 per cent repeat intention purchase for smartwatch owners, showing a clear shift in market preferences.

“The battle for the wrist wearables market has been won by smartwatches,” Telsyte Senior Analyst, Alvin Lee.

According to Telsyte’s ongoing research, the average cost of smartwatches has decreased by 22 per cent between 2017 and 2019 compared to an increase of more than 15 per cent for smartphones, tipping the scales in favour of greater smartwatch sales during longer smartphone replacement cycles.

Telsyte’s latest research also shows there is growing interest in smartwatches with built-in mobile connectivity such as those enabled by eSIMs – especially amongst smartwatch users (53% of current smartwatch users versus 22% of total Australians aged 16 and over).

For further information on the study or media enquiries contact:

Foad Fadaghi
Managing Director
Tel: +61 2 9235 5851
Email: ffadaghi@telsyte.com.au

Alvin Lee
Senior Analyst
Tel: +61 2 9235 5890
Email: alee@telsyte.com.au

The Telsyte Australian Smartphone & Wearable Devices Market Study 2019-2023 is a comprehensive study which provides subscribers with:

  •  Smartphone market sizing estimates, platform and vendor market shares and forecasts

  • Smart wrist-based wearables market sizing estimates, platform and vendor market shares and forecasts

  • End user trends across devices, application usage, platforms and operators

  • Purchase intentions and acquisition channels

  • Strategic analysis of market trends and issues

Telsyte measures smart wearable devices in the Telsyte Australian Smartphone & Wearable Devices Market Study 2019-2023 as computing accessories worn on a user’s wrist typically paired and controlled via a smartphone. Examples includes products from Adidas, Apple, Asus, Fitbit, Fossil, Garmin, Huawei, iFit, Misfit, Nike, Samsung, Skagen, SPACETALK, TomTom, Withings and others.

In preparing this study, Telsyte used:

  • Telsyte’s mid-year consumer survey conducted in July 2019 with a representative sample of 1,026 respondents, 16 years and older.

  • Telsyte’s annual Digital Consumer survey conducted in November and December 2018 with a representative sample of 1,162 respondents, 16 years and older.

  • Interviews conducted with executives from service providers, network operators, manufacturers, retailers, financial analysts and channel partners.

  • Financial reports released by service providers, manufacturers and retailers.

  • On-going monitoring of local and global market and vendor trends.

  • Analyst reviews of leading smartphone and wearable devices.

 Editor’s note:

Telsyte measures sales of devices (“sell out”), not shipments or sales to retailers or carriers (sometimes called “sell-in”). Telsyte believes this is a more accurate measure of performance of products in a marketplace. Telsyte does not rely on disclosure from vendors or general assumptions made for large multinational companies that do not release local market data. Telsyte uses a comprehensive methodology that includes surveys of consumers, discussions with vendors, carriers and their partners, retailers, and financial analysts. In addition, public financial results from manufacturers and carriers are used.  Telsyte tests a wide range of products in real life usage scenarios and conducts satisfaction and repeat purchase surveys with large and representative samples of Australian smart device users. Telsyte is a pioneer in measuring and reporting smartphone sales in Australia and has been providing insights on mobile technologies since 2006.

 About Telsyte

Telsyte is Australia’s leading emerging technology analyst firm. Telsyte analysts deliver market research, insights and advisory into enterprise and consumer technologies. Telsyte is an independent business unit of DXC.technology. For more information visit www.telsyte.com.au

The material in this article is copyright protected and not intended to be altered, copied, distributed or used for any commercial or non-commercial purpose, except for news reporting, comment, criticism, teaching and scholarship.

Australians turn to multiple subscriptions for entertainment

SVOD subscription services continued to grow strongly in 2019 driven by Australians’ love for sports and video entertainment

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SYDNEY, AUSTRALIA, Australians have a growing taste for sports and video entertainment content sending the Subscription Video on Demand (SVOD) services market to new heights, reaching 12.3 million total subscriptions at the end of June 2019, according to new research from Australian emerging technology analyst firm, Telsyte.

A solid year-on-year increase of 29 per cent has driven subscription up from 9.5 million in June 2018. Today more than half (55%) of Australian households subscribe to SVOD services.

Households continue to show a demand for multiple services , with 43 per cent have more than one SVOD service, up from 30 per cent in 2018. This has steadily been increasing as consumers turn to multiple providers that are battling it out for content rights.

The Telsyte Australian Entertainment Subscription Study 2019 found Netflix is the market leader with around 4.9 million subscriptions and Stan passed the 1.7 million mark at the end of June 2019, remaining the second largest single service provider.

The sports SVOD category saw continued strong demand, driven by adoption of Kayo Sport, Optus Sport and AFL, FFA, Netball and NRL Live passes via Telstra. Telsyte estimates the total “sports” SVOD category (excluding Foxtel Now as it provides a mix of sports and other entertainment content) had around 4.4 million subscriptions at the end of June 2019, up from 3.6 million in June 18, driven by new services and telecom services bundles.

The report found the total Pay TV market maintained just over 3 million subscriptions at the end of June 2019, including cable, satellite and IPTV Fetch TV. Foxtel’s Pay TV segment has been under continued pressure due to increasing adoption of SVOD, including its own base shifting to Foxtel Now and Kayo Sport. Fetch TV remained the growth engine for the Pay TV market.

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New content to maintain growth

Telsyte’s latest consumer survey shows those willing to pay for video subscription services have an average monthly budget of around $30 to cover all their video entertainment needs. The same survey also shows 1 in 3 Australians have no set limit to the number of paid video subscription services they would simultaneously subscribe.

“Subscriptions will be a critical way entertainment and technology brands connect with and monetise their customers,” Telsyte Managing Director, Foad Fadaghi, says.

SVOD services have been proven to be highly sticky in Australia and Telsyte’s latest consumer survey shows nearly half of existing SVOD users believe there will always be enough new content to keep them interested and will not cancel their service, regardless of how many hit TV shows the service has to offer.

Total SVOD subscriptions could reach more than 21 million by the end of June 2023 to meet Australians’ appetite for content. Telsyte believes the demand of existing and new SVOD services will be driven by key content rights during the next 12 to 24 months as more studios and content producers prepare to launch direct services.

Telsyte research shows 1 in 4 Australians (and 37% of existing SVOD users) are interested in subscribing to a potential new a powerful entrant in Disney.

Telsyte research shows there is an opportunity to cross bundle different type of subscription services such as SVOD and streaming music services. Only 1 in 3 Australians subscribe to both SVOD and music streaming services.

Among those do not subscribe to both services, around 1 in 6 would be interested in subscribing to bundled services if it will cost them less to subscribe to the services separately. This might be an opportunity for global players such as Google, Amazon and Apple.

Streaming music continues to grow

As with TV, the streaming music subscriptions market continued to grow steadily driven by service bundles, regular promotions and rapid adoption of smart speakers. Telsyte estimates Australians have taken up more than 12 million streaming music subscriptions at the end of June 2019, with 42 per cent being paid subscriptions.

The top 3 streaming music service providers in Australia remained Spotify, Google (including Google Play Music, YouTube Music and YouTube Premium) and Apple.

Usage of streaming music has just taken over radio time with the average subscriber listening 7.5 hours a week, compared to 7.3 hours for radio. Telsyte forecasts there will be 16.2 million streaming music subscriptions by the end of June 2023.

The availability of very large mobile data caps has been influencing consumer behaviour around radio consumption, facilitating more streaming in car.

Gaming a key subscription market

Telsyte anticipates the gaming market to become the other major entertainment subscription segment alongside streaming video and music subscription services as consumers are becoming more comfortable with the subscription model.

Telsyte research shows Australians have already taken up more than 4 million games related subscriptions at the end of June 2019, consisting of computer and console games subscriptions (such as EA Access and Xbox Game Pass), massively multiplayer online game (MMOG) subscriptions (such as World of Warcraft) and console subscriptions (e.g. PlayStation Plus, Xbox Live Gold).

Telsyte estimates the number of games subscriptions could close to quadruple to more than 16 million by the end of June 2023 with better access to fast Internet connectivity, the arrival of next generation game consoles and new services such as Apple Arcade and Google Stadia that appeal to a broader audience with the ability to play on different devices.

Telsyte research shows around 12.7 million Australians play digital games across devices and more than 8 million play on smartphones alone.

The same research shows 42 per cent of Australians that play games are interested in game subscription services and 1 in 4 are interested in cloud gaming services.

“Game subscriptions have been more focused on consoles and computers, but there are untapped opportunities on mobile with a large base of casual and regular players,” Telsyte Senior Analyst, Alvin Lee, says.

Telsyte expects there will be more than 15 million 5G handsets in use by the end of June 2023, forming the foundation for cloud gaming services adoption.

 

For further information on the study or media enquiries contact:

Foad Fadaghi

Managing Director

Tel: +61 2 9235 5851

Email: ffadaghi@telsyte.com.au

Alvin Lee
Senior Analyst
Tel: +61 2 9235 5890
Email: alee@telsyte.com.au

The Telsyte Australian Entertainment Subscription Study 2019 is a comprehensive study which provides subscribers with::

  • Market sizing and forecasts of the Australian entertainment subscriptions market, including video, music and games.

  • Key market share data in SVOD, BVOD, Pay TV, Music and games

  • Insights into consumer attitudes and technology adoption trends

  • Uptake, intention and detailed analysis of

    • Video services including: SVOD, pay TV and BVOD services

    • Streaming music services

    • Games subscription services

  • Services consumption preference including devices, fixed and mobile service.

  • Insights into the future of entertainment subscription services in Australia.

In preparing this study, Telsyte used:

  • An online survey conducted in July 2019 with a representative sample of 1,026 respondents, 16 years and older.

  • An online survey conducted in November and December 2018 with a representative sample of 1,025 respondents, 16 years and older.

  • Interviews conducted with executives from media companies, service providers, network operators, content providers, retailers, and hardware manufacturers.

  • Financial reports released by media companies, service providers and network operators.

  • On-going monitoring of local and global market and vendor trends.

About Telsyte

Telsyte is Australia’s leading emerging technology analyst firm. Telsyte analysts deliver market research, insights and advisory into enterprise and consumer technologies. Telsyte is an independent business unit of DXC.technology. For more information visit www.telsyte.com.au

The material in this article is copyright protected and not intended to be altered, copied, distributed or used for any commercial or non-commercial purpose, except for news reporting, comment, criticism, teaching and scholarship.

5G set to rejuvenate Australian mobile services market

1 in 4 mobile users willing to pay more for 5G

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SYDNEY, AUSTRALIA – With more than 15 million 5G handset services in operation (SIOs) expected by the end of June 2023, the adoption of 5G is set to be faster than the previous generations, according to new research from emerging technology analyst firm, Telsyte.

The Telsyte Australian Mobile Services Market Study 2019 found the local market is forecast to reach 15 million 5G handsets between 6 to 12 months sooner than when the market shifted from 3G to 4G technologies.

The Australian mobile services market grew by around half a million new SIOs in the six months to December 2018, reaching 35.4 million at the end of December 2018.

Telstra and MVNOs were the top two for SIO net growth, driven by IoT and competitive handset plans, respectively.

Telsyte research shows more than 70 per cent of handset SIOs (including prepaid, post-paid BYO M2M and post-paid BYO contract) are now BYO, up from around 64 per cent in 2015.

“The prolonging smartphone replacement cycle and attractive pricing have been driving the BYO market,” Lee says.

Telsyte expects the BYO market will continue to grow steadily in Australia; however, handset contract plans will benefit most initially from the arrival of 5G as there will be more 5G handsets priced above $1,000 in the next 18 months.

 

Faster 5G to help curtail revenue decline

The availability of 5G handsets and networks is set to be faster than previous generations, with consumer expected to respond.

The smartphone market is ripe for upgrades with survey data showing a quarter of consumers are holding off buying a new smartphone until 5G becomes available.

Unlike 4G, 5G handsets are already available from the outset.

The first 4G handset in Australia (HTC Velocity 4G) was released 3 months after Telstra officially launched 4G.

“Australia is at the very beginning of 5G, but when 5G becomes the standard, consumers won’t be able to look back” says Telsyte Senior Analyst, Alvin Lee.

Telsyte also anticipates widespread network availability to be quicker for 5G than it was for 4G with Optus and Vodafone moving faster with their roll outs than with 4G.

According to Telsyte’s mobile services research, the total services revenue (measured half-yearly) has been in decline since December 2017, mainly due to price-driven competition, giving carriers added incentive to try and arrest declines.

Telsyte research shows 5G has the potential to halt declining revenues. In a positive sign for carriers, some 1 in 4 Australian mobile users are willing to pay more for a 5G service compared to their existing service. Among those willing to pay more for 5G, the average is between $5 and $10 a month.

The arrival of 5G is also expected to drive business investment, especially with the potential of next generation IoT applications. Telsyte forecasts enterprise 5G opportunities driven by application development, IT services, platforms and connectivity could reach around $45 billion per annum by the mid-2020s.

The share of total 5G spending on network connectivity is expected to increase from around 1 per cent in 2020 to nearly 15 per cent by the mid-2020s as more devices and services connect to the 5G networks.

For further information on the study or media enquiries contact:

Alvin Lee
Senior Analyst
Tel: +61 2 9235 5890
Email: alee@telsyte.com.au

The Telsyte Australian Mobile Services Market Study 2019 is a comprehensive study which provides subscribers with:

  • Market sizing and forecasts of the Australian mobile services market

  • Analysis of market share and carrier performance

  • End-user trends

  • Market trends

  • Mobile services market KPIs

In preparing this study, Telsyte used:

  • An online survey conducted during November and December 2018 with a representative sample of 1,025 respondents, 16 years and older.

  • Interviews conducted with executives from mobile service providers, device manufacturers, and channel partners.

  • Financial reports released by service providers.

  • On-going monitoring of local and global market and vendor trends.

About Telsyte

Telsyte is Australia’s leading emerging technology analyst firm. Telsyte analysts deliver market research, insights and advisory into enterprise and consumer technologies. Telsyte is an independent business unit of DXC.technology. For more information visit www.telsyte.com.au

The material in this article is copyright protected and not intended to be altered, copied, distributed or used for any commercial or non-commercial purpose, except for news reporting, comment, criticism, teaching and scholarship.




5G becoming crucial for future business applications

Australian Enterprise 5G market to generate $45 billion by the mid-2020s

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The enterprise 5G market in Australia is forecast to generate around $45 billion per annum by the mid-2020s, consisting of next generation application development, IT services, platforms and connectivity, according new research from Australian emerging technology analyst firm, Telsyte

The Telsyte Australian Enterprise IoT & 5G Study 2019 shows more than two thirds (68%) of IT and business leaders already see 5G as crucial for their business strategy going forward. Half of these respondents indicating 5G was critical for future application development, as well as supporting existing applications.

Future applications are expected to make use of the huge data transfer capability, more reliable connectivity and lower latency, which will have the ability to change software architectures, allowing for real-time services and cloud based AI architectures.

The top three barriers to 5G investment cited were integration with current systems (34%), a lack of business case (23%) and security concerns (17%).

Lack of skills is also an issue with more than 25 per cent of respondents indicating they will be looking for an outsourced partner for developing 5G applications.

Enterprise IoT Maturity on the rise

Nearly half of businesses surveyed expect five times or greater connected devices as today within their organisations within five years’ time. This explosion in devices is fuelling innovation and experimentation with “The Internet of Things” (IoT).

 

Telsyte’s latest Australian Enterprise IoT maturity model shows that 32 per cent of organisations now have a strategic approach to IoT, of which around half have pilot programs running or already have IoT in operations

Among companies that currently do not have a formal IoT strategy, almost 1 in 3 large organisations (200+ employee) plan to adopt an IoT strategy within 12 months.

The biggest barriers are lack of a business case (26%), IoT seen as too expensive (25%) and a lack of skills and expertise (20%). Among those that have overcome the barriers, early signs show that IoT is having a big impact on their businesses.

IoT applications promise big ROI

Enterprise IoT has a diverse range of applications, with the main areas businesses believe IoT will be used in being maintenance (32%), manufacturing (31%) and sales (30%).

Nearly a third (32%) of large firms are also reporting IoT to be suitable for customer service applications.

Of the third of existing businesses that have measured the Return on Investment (ROI) of IoT, 65 per cent claim it increased revenues; half saw an increase in productivity; and, similarly, half realised "better customer satisfaction or advocacy". This closely aligns to the early adopters of IoT which have been in the transport, logistics or asset heavy industries.

Operational cost savings was reported by 39 per cent of organisations, of which around 80 per cent saw nearly a one-third reduction in costs, either through efficiency gains or better management of assets.

Cohesive strategy imperative amid ‘shadow’ IoT

Like its close namesake “shadow IT”, or the spending on IT by non-IT groups in business, enterprises are now facing a wave of “shadow IoT”, where diverse teams are experimenting with connected devices, often unsanctioned or experimental in their nature.

Telsyte research found, one in four companies have IoT capable devices, but no formal strategy around them.

Telsyte research shows that while this approach is growing it does not come without challenges.

A high 81 per cent of companies with shadow IoT are experiencing "stalled" projects.

Other issues such as inconsistent technology selection, poor fit for purpose and higher costs are also experienced by organisations experiencing shadow IoT.

Telsyte Managing Director, Foad Fadaghi, says businesses that are just tinkering with IoT devices are hitting a wall.

"Critical to the success of implementing IoT strategies seems to be taking a scalable and holistic approach, with security considered upfront," Fadaghi says.

The study found more than half of the survey respondents believed that around a quarter of their IoT devices might be connected via cellular technology within 3 years’ time. Around a quarter of organisations believe up to 50 percent could be connected via mobile networks.

For further information on the study or media enquiries contact:

Foad Fadaghi
Managing Director
Tel: +61 2 9235 5851
Email: ffadaghi@telsyte.com.au

Alvin Lee
Senior Analyst
Tel: +61 2 9235 5890
Email: alee@telsyte.com.au

The Telsyte Australian Enterprise IoT & 5G Study 2019 is a comprehensive study which provides subscribers with:

  • Maturity levels, marketing sizing and insights into emerging trends in IoT and 5G

  • Enterprise IoT & 5G trends across enterprise applications, return on investment, cyber security, and 5G outsourcing

  • Australian organisations IT trends and strategies

  • Strategic analysis of market trends and challenges

In preparing this study, Telsyte used:

  • An online survey of 271 IT decision makers across Australian organisations with greater than 20 employees.

  • The respondent was required to have a strong understanding of their organisation’s IT purchasing and strategy, but was not limited to the CIO or IT department

  • Sampling was conducted on a size of spend weighting basis, with 60% of respondents coming from organisations with greater than 200 employees

  • Public information released by service providers, vendors and platforms.

  • On-going monitoring of local and global market and vendor trends

About Telsyte

Telsyte is Australia’s leading emerging technology analyst firm. Telsyte analysts deliver market research, insights and advisory into enterprise and consumer technologies. Telsyte is an independent business unit of DXC.technology. For more information visit www.telsyte.com.au

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