Australian smartphone sales slow ahead of 5G

Smartwatch sales boost growing wearables market

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SYDNEY, AUSTRALIA - Australians are increasingly buying wearable devices as smartphone sales have slowed, according to new research from Australian emerging technology firm, Telsyte.

The Telsyte Australian Smartphone & Wearable Devices Market Study 2018-2022 found 4.3M smartphones sold in the first half of 2018, down 3.7 per cent from the same time last year (4.4M).

Despite leading in market share (53% Android vs. 47% Apple), Android sales during the measured period were down 7 per cent, compared to Apple which was up two per cent.

 

“Android smartphone sales had a sobering first half in 2018 after a strong upgrade year in 2017” Telsyte Senior analyst, Alvin Lee says.

“The balance of 2018 could remain in favour of Apple with more iPhone users expected to be coming out of contract this year” Lee says.

Apple remained market leader in the first half, with Samsung, Oppo and Huawei making up the top four according to Telsyte.

Australians are gravitating towards premium models as more high-end phones were purchased during the first half of 2018.

More than half (55%) of iPhones purchased in the first half of 2018 were the higher end models (iPhone 8, 8 Plus and X), compared to 50 per cent a year ago (iPhone 7 & 7 Plus). Furthermore, nearly one-third (32%) of smartphones purchased outright cost more than $800 in the first half of 2018 compared to only 22 per cent in 2016.

Apple maintained the highest repeat purchase intention (90%+), followed by Samsung (85%+). No other smartphone brand has a repeat purchase intention rate of higher than 55 per cent in Australia.

Consumers hold on for 5G handsets

Telsyte research shows around 1 in 3 smartphone owners are showing signs of holding off buying a new smartphone until 5G models become available. Telsyte believes this might impact the market performance in the next 18 months before 5G smartphones become widely available.

“The arrival of 5G will create the next big upgrade event” Telsyte Managing Director, Foad Fadaghi says.

“Carriers will be hoping 5G smartphones are available ahead of their network launches, if not soon thereafter” Fadaghi says.

Telsyte found that of those most willing to wait for 5G handsets includes users of premium model smartphones (e.g. Samsung Galaxy S8 & S9, iPhone X, iPhone 8) at around 50 per cent, and those currently on contract (40%).

Nearly half (47%) of iPhone users that intend to purchase a new iPhone in 2019 indicated they were likely to wait until a 5G iPhone was available.

Smartwatch sales blossom as interest in wearables increases

Smartwatch sales in Australia continue to grow strongly with around 680 thousand units sold during 1H18, up by more than 80 per cent from 1H17.   Telsyte estimates that around 15 per cent of smartphone users are now using a smartwatch.

Apple continued to dominate the smartwatch market, with more than half of all units sold being Apple Watch. Others, including Fitbit, Samsung and Garmin are starting to see growth due to greater awareness, lower prices and customers upgrading from basic fitness bands.

Apple Watch has the highest repeat purchase intention at 80 per cent, while Fitbit sits at around 60 per cent.

Smart accessories like Apple AirPods have been a key companion to the iPhone. Telsyte estimates more than 800,000 AirPods have been sold in Australia since launching at the end of 2016.

Other potential wearable categories, such as smart glasses are gaining interest from Australians. Telsyte research found 30 per cent are aware of smart glasses, and one-in-five are showing signs of being interested in buying one, especially if the design is slim and light (like sunglasses) and it is priced similarly to a smartphone or tablet.

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 2018-2022 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
  • Device profiles and Telsyte analyst ratings of tested devices

Telsyte measures smart wearable devices in the Telsyte Australian Smartphone & Wearable Devices Market Study 2018-2022 as computing accessories worn on a user’s wrist typically paired and controlled via a smartphone. Examples includes products from Adidas, Apple, Asus, Fitbit, Garmin, Huawei, Jawbone, LG, Microsoft, Motorola, Nike, Pebble, Samsung, Sony, TomTom and others.

In preparing this study, Telsyte used:

  • An online survey conducted in July 2018 with a representative sample of 1,047 respondents, 16 years and older. An additional 338 Australian respondents, 16 years of age and older were surveyed to determine smartphones and smart wearables purchases made between January 1 2018. to June 30 2018.
  • An online survey conducted in November 2017 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 and manufacturers.
  • 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

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