Australian tablet sales drop 28% in first half of 2014; lack of reasons to upgrade holding back market

Apple’s iPad outsold by Android-based devices for first time, Windows-based tablets gaining ground

SYDNEY, AUSTRALIA – There were 1.8 million media tablets sold in Australia in the first half of 2014, a 28 per cent decline from the previous six months, according to a new study from emerging technology analyst firm Telsyte.

Following three solid years of growth, the impact of a slowing demand was exasperated with the traditionally slower first half retail cycle. The Telsyte Australian Media Tablet Market Study 2014 reveals longer upgrade cycles are impacting new sales with the market now in a lull as customers wait for a reason to upgrade. Despite this, the population penetration of media tablets increased to 46% or 10.8 million people at the end of June 2014.

The most popular tablet in use remains the iPad 2 which was originally released back in March 2011, and despite its age is expected to be able to run Apple’s latest mobile operating system iOS8, due to be released alongside the new iPhone 6 in September.

Android just outsells Apple, but trend will likely reverse in H2

More Android units were sold for the first time in Australia in the first half of 2014, following global trends despite Australia’s love affair with Apple products.

Apple has retained 46 per cent tablet market share, with the rest market being made up of Android (47 per cent) and Windows-based devices (7 per cent).

Telsyte managing director, Foad Fadaghi, says sales of Android-based units just edged out Apple for the first time in the six months to June 30, but he believes this trend will be reversed in the second half of 2014, restoring Apple’s number one place by year’s end.

“Apple should have a strong second half if it can bring upgraded models to market and benefit from a halo effect created by the iPhone 6 launch” Fadaghi says.

“More than half of iPhone users already have an iPad, whether consumers upgrade both this year will be the question many will be asking” Fadaghi says.

Telsyte surveys are showing greater purchase intentions for iPads overall in H2, and higher repeat purchase intentions by existing iPad users than Android tablet users.

Low-end devices continue to flood the market putting pressure on premium Android tablet sales. And despite Android units outselling iPads for the first time, Android only captured a third of the market in terms of dollar value.

Two million units forecast to sell in H2, as smartphone buying cycle hits.

Telsyte forecasts 2.1 million tablet units to be sold in H2 2014, which will be influenced by a strong smartphone purchasing cycle expected to start in October. Telsyte believes new smartphone sales might delay purchases of new media tablets for many existing users until 2015 and beyond.

“A tablet upgrade cycle might not commence until current devices become more readily obsolete, either in terms of computational capability, operating system, application interoperability, graphics or connectivity,” Fadaghi says, adding the ability to work with wearable devices or sensors might be a driving factor for upgrades.

According to Telsyte, the demand for smartphones is expected to be nearly three times more than media tablets for the second half of 2014*.

Telsyte research has also shown the impact of phablets on the purchase intention of tablets in H2 is marginal (Only 5% less likely to be considering buying a new tablet in H2, if using a phablet currently, compared to standard smartphone users). This might change following the impact of a larger screen iPhone 6.

* (Telsyte forecast 5.6 Million smartphones will be sold in H2, 2014)

For further information on the study or media inquiries contact:

Foad Fadaghi
Managing Director
Tel:  +612 9235 5851 
Twitter: @foadfadaghi

About Telsyte’s Australian Media Tablet Market Study 2014

Telsyte’s Australian Media Tablet Market Study 2014 is a comprehensive study which provides subscribers with:
• Tablet market sizing, platform and vendor market shares and forecasts
• End user trends across devices, services and mobile media
• Purchase intentions
• Discussions on strategic issues including platform and manufacturer trends
• Product reviews and insights
• Tablet audience estimates for media companies

In preparing this study, Telsyte used:
• Financial reports released by mobile carriers, manufacturers and service providers.
• Interviews conducted with executives from mobile operators, vendors, retailers, and channel partners.
• An online survey of a representative sample of Australians 16+ years of age conducted with 1,018 respondents in June 2014.
• On-going monitoring of local and global market and vendor trends.

About Telsyte
Telsyte delivers strategic insights and advisory services to businesses that are producing, or are impacted by, disruptive technologies. Telsyte publishes studies into emerging consumer and business markets and provides custom research and advisory services. Our market leading coverage includes mobility, enterprise IT, digital media and telecommunications. Telsyte is a wholly-owned independent business unit of UXC Limited. UXC is an ASX-listed Australian IT services company and the largest Australian-owned ICT consultancy firm with over 2,500 customer organisations in the private and public sectors across Australasia.

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