Australian tablet sales bounce back as new higher end PC replacement devices enter the market

October 25, 2016

Unit sales grow for first time in two years off the back of convertible ‘2-in-1’s

SYDNEY, AUSTRALIA – Sales of tablet devices in Australia grew 4 per cent year-on-year to 1.59 million units in the first half of 2016, according to a new study from emerging technology analyst firm Telsyte.

The Telsyte Australian Media Tablet Market Study 2016-2020 shows the market for tablets has stablised and recorded modest growth for the first time (half-on-half) since 2014.

As predicted by Telsyte in March 2016, higher end convertible tablet-notebook devices (including Apple’s iPad Pro, Microsoft’s Surface and the Samsung Galaxy Tab Pro S) have seen growing adoption and have now halted the decline in unit sales after the market took a battering following a collapse in sub-premium devices in 2014.

The top four vendors in H1, 2016 were Apple, Samsung, Microsoft and Lenovo – which collectively sold 80 per cent of units.

The market is on track to record sales of 3.21 million units by the end of the year, as consumers start to replace ageing tablets and computers with newer, more functional touch screen devices.

“The decline in tablet sales that began in 2014 has stabilised and the market seems to have started to turn a corner,” Telsyte Managing Director, Foad Fadaghi, says.

Revenue from the market is the highest it has been since the slump in H1 2014. Sales are up 33 per cent on H1 2015 as the market starts to embrace more expensive 2-in-1 devices rather than lower-end, slate-only formats.

Despite a fall in market share, Telsyte believes Apple will retain its market leadership in the next 2 years as consumers replace ageing iPads. Apple continues to enjoy a repeat purchase intention rate of 80 per cent, according to Telsyte research, and many of the top selling iPad models from a few years ago are now unsupported, such as the third generation iPad (released in March 2012) and the iPad 2 (released in March 2011). These devices are no longer capable of loading the latest iOS 10 operating system.

Convertible 2-in-1s set the pace

Telsyte end-user research shows that 1 in 5 tablet users have already tried using their tablet with a keyboard (as a 2-in-1) including buying an aftermarket keyboard (or combination case/keyboard). Of these, nearly three quarters continue using a keyboard with their tablet regularly. The rise of 2-in-1s is expected to also drive demand for other tablet accessories, such as protective covers, styluses and port extensions and adapters.

One in five (21%) tablets sold in H1, 2016 were Windows-based devices, indicating a growing trend which has been driven by Microsoft-branded tablets. Microsoft retains leadership in the Windows 2-in-1 category according to Telsyte’s latest findings[1].

Similarly, over 20 per cent of devices sold had screens above 10-inches, indicating a shift to using tablet devices for more than just portable content consumption.

"Telsyte believes sales of Windows-based tablets should exceed Android-based unit sales within the next 18 months,” Fadaghi says.

Telsyte also notes that Android tablet sales might also be impacted by the Samsung Note 7 recall and eventual withdrawal, despite the Note 7 not being in the tablet category.

Telsyte’s tablet study includes estimates of computer purchase intentions, as the tablet and computer market increasingly merge. Findings show that a PC replacement cycle is due with more than 700 thousand PCs and Macs (without touchscreens) are expected to be sold in the second half of 2016 with around 12 per cent of these units being Apple computers.

Telsyte figures show that 15.1 million Australians have now got access to a tablet device or almost two thirds of people across all age groups.

For further information on the study or media inquiries contact:

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

About Telsyte’s Australian Media Tablet Market Study 2016-2020

Media Tablet definition: A computer device consisting of a 7 to 14 inch touch screen, including 2-in-1 devices with detachable or foldable keyboards that provide a tablet form factor experience.

2-in-1 definition: Primarily refer to laptops that have a touch screen and detachable keyboards or foldable form factor 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 TabPro S, Google Pixel C, Sony Xperia Z4 Tablet, Toshiba Portege Z20t, or Lenovo Yoga 3 Pro.

[1] Please note Telsyte measures Apple iPad Pro models as 2-in-1s for comparison reasons, due to having a specifically designed Apple keyboard, typically sold together.

Telsyte’s Australian Media Tablet Market Study 2016-2020 is a comprehensive 103 page report which provides subscribers with:

Market sizing, platform and vendor market shares and forecasts
End user trends across devices, usage, platforms and accessories
Tablet and computer purchase intentions and loyalty
Product reviews and insights
Tablet audience estimates and strategies for media companies

In preparing this study, Telsyte used:

An online survey of a representative sample of Australians 16+ years of age conducted with 1,097 respondents in July 2016. An additional 394 Australian respondents, 16 years of age and older were surveyed to specifically determine smartphone, smart wearables and tablet purchases made between January 1 2016 to June 30 2016
Financial reports released by mobile carriers, manufacturers and service providers.
Interviews conducted with executives from mobile operators, vendors, retailers, and channel partners.
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. Telsyte is an independent business unit of DXC Technology . 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.

Virtual reality set to invade Australian lounge rooms as consoles-based VR ignites consumer interest

October 13, 2016

2.5 million Australian households expected to have virtual reality headsets by 2020

SYDNEY, AUSTRALIA – Demand by video gamers is expected to drive a boom in VR headset sales throughout the holiday season, according to a new study from emerging technology analyst firm Telsyte.

The Telsyte Australian VR & AR Market Study 2017 predicts 115,000 VR headset units will be sold in the second half of 2016 with sales rapidly growing to over 500,000 units in 2017. In H2 2016, Telsyte estimates that 46 per cent of unit sales will be console-based VR systems, 46 per cent mobile VR and the remaining 8 per cent PC-based systems.

By 2020, Telsyte estimates over 3.3 million units will have been sold in Australia (of all types) reaching a household penetration of 22.3 per cent or 2.5 million households, as more consumers are drawn in by the immersive attraction of virtual reality.

Telsyte research shows that 75 per cent of Australians over the age of 16 are now aware of VR, up from 49 per cent in October 2015. The backing of multinational brands such as Google, Facebook and Sony has helped lift awareness and created pent-up demand in Australia.

Telsyte predicts Sony’s PlayStation®VR (PS VR) will be the lounge room leader given the large installed base of PlayStation®4 (PS4™) home consoles capable of utilising PlayStation VR. Telsyte estimates that there are in excess of 1 million PS4 consoles in Australian households, making it a mainstream platform for the adoption of VR. Accordingly, Telsyte estimates 65 per cent of VR hardware revenue will be generated by PlayStation VR in H2 2016. This prediction is backed by Telsyte survey findings which indicate that 20 per cent of PS4 users indicate a desire to buy a VR headset.

Mobile VR is expected to also generate strong sales, but current technological limitations (e.g. not having full 3D head tracking) will limit its use and applications, in particular with video games. Telsyte believes mobile VR will remain a gateway for many consumers to more functional systems but will remain an important platform for VR movies, and 360 video applications such as documentaries, eCommerce and education.

Telsyte believes video gaming will be a key driver for the adoption of VR in Australia. 76 per cent of those interested in buying a VR unit indicated they ‘want to purchase a VR device to have an enhanced gaming experience’, while 66 per cent indicated that they were interested in applications other than gaming, including movies, education, sports viewing, events, and eCommerce.

Nearly 1 in 3 regular game buyers (28 per cent) indicated a desire to purchase a VR headset according to a survey conducted by Telsyte in March 2016 for the Interactive Games Entertainment Association (IGEA). Of these, 40 per cent indicated a desire to purchase a VR headset as soon as 2016. Telsyte estimates that there are more than 5 million regular video games buyers in Australia, making for a vibrant pool of potential early adopters across PC, console and mobile VR platforms.

“Entertainment will be the main driver of VR adoption in Australia, however, organisations of all types are excited by the prospects of developing VR applications” Telsyte Managing Director, Foad Fadaghi says.

Telsyte research conducted with CIOs and IT decisions makers in August 2016, indicated that some 60 per cent of Australian and New Zealand organisations had already begun developing or were considering developing VR applications, for either internal and external (customer facing) uses.

Despite the technological developments in VR, there still remains some concerns around the health impacts of prolonged use. One in three Australians surveyed by Telsyte indicated they were “concerned about the health effects of VR” with the main concerns relating to the impact on eyesight (52 per cent) and “not enough knowledge of health effects” (48 per cent).

*In addition to the announced and available products in the market in October 2016, Telsyte predicts there will likely be new market entrants in the VR and AR market in the forecast period, including games console manufactures (other than PlayStation), smart device vendors (e.g. Apple) and other entertainment and visual/display technology brands.

For further information on the study or media inquiries contact:

Foad Fadaghi
Managing Director
Tel: +61 2 8297 4651
Twitter: @foadfadaghi
Email: ffadaghi@telsyte.com.au

About Telsyte’s VR & AR Market Study 2017

Telsyte’s Australian VR & AR Market Study 2017 is a comprehensive 69 page report and advisory service offering subscribers:

Market sizing estimates, platform and vendor market shares, hardware revenues and forecasts
End user trends across platforms
Application development trends
Purchase intentions and use cases
Device profiles and ratings
Audience estimates and forecasts useful for contentand application developers

In preparing this study, Telsyte used:

Interviews conducted with executives from VR and AR vendors, retailers, software developers, game publishers and channel partners.
Hands on testing of devices by analysts, including pre-release and post release products.
An online survey of a representative sample of 1,097 Australians 16+ years of age conducted in July 2016
An online survey of 302 CIOs and IT decision makers in Australian and New Zealand organisations with 20+ employees (Australia) and 10+ employees (New Zealand) in August 2016
An online survey of a representative sample of 1,029 Australian video game buyers 16+ years of age conducted for IGEA in March 2016
Financial reports released by manufacturers, publishers and service providers.
On-going monitoring of global and local market trends and vendors.

Australian businesses embrace enterprise mobility with market set to approach $5.5 billion by 2020 as organisations go “mobile first”

October 12, 2016

Mobile device management used by half of Australian organisations, business process re-engineering still nascent

SYDNEY, AUSTRALIA – Australian businesses are investing more in enterprise mobility management tools as the market for management software, devices and services will approach $5.5 billion by the end of the decade, up from $3.3 billion in 2016, according to new research from emerging technology analyst firm Telsyte.

New findings from the Telsyte Australian Enterprise Mobility Market Study 2017 predict the enterprise mobility market will consist of $1.9BN worth of devices (smartphones and tablets), $1.2B worth of management tools (including MDM) and $2.3Bn of integration and support services by 2020 as more businesses move to a mobile first strategy and regularly support a workforce that is increasingly able to work anywhere.

Telsyte defines MDM as a cross-platform application to manage devices, applications, data and content on smartphones and tablets (often also called EMM or MAM).

According to Telsyte, 34 per cent of businesses have staff that regularly work outside of the work premises, which has been a consistent trend over the past two years.

Furthermore, mobility is becoming more strategic for corporations, with C-Suite executives now in charge of mobility in 80 per cent of organisations, up from 62 per cent in 2014.

Despite the rise in BYOD (bring your own device), almost 80 per cent of business still buy some smartphones for staff, and 50 per cent buy tablets. Almost half of all tablets purchased have cellular features given the productivity benefits from an always-on connection.

The two big consumer smartphone brands also dominate the enterprise, with most organisations purchasing Apple and Samsung smartphones in that order.

Bring your own apps (BYOA) grows up

Bring your own apps (BYOA), a term coined by Telsyte more than four years ago, has started to gather steam in the Australian market.

BYOA awareness has increased and more organisations are trying to enforce rules that stop or limit the use of consumer grade apps for workplace use, mainly due to security fears. However, Telsyte’s latest research shows organisations’ efforts are being overwhelmed.

"Despite the fears, around 10 per cent of organisations admit they can’t control BYOA and staff use personal apps regardless of policies," Telsyte Senior Analyst, Rodney Gedda, says.

Around half of all businesses with greater than 20 employees allow BYOA, with most citing productivity and employee demand as the main reasons, as well as lack of training needed to use apps.

"With arrival of Facebook’s Workplace, more companies will look to enterprise applications that leverage consumer platforms to reduce training requirements and promote adoption, a trend that has been a driver of BYOA in the past," Gedda says.

The main personal applications used in in the workplace are e-mail, file storage (e.g. Dropbox) and project/task management. Group calendaring is also on the rise.

However, concerns remain around data privacy and security of BYOA apps in the minds of more than a third of all CIOs.

MDM growing amid security concerns, BYOA

Telsyte estimates that almost half of all organisations in Australia now have an enterprise-grade MDM with this expected to near 70 per cent by 2020.

Australian enterprises still have a lot of opportunity to go beyond basic management and re-engineer business processes with mobile devices and applications. Telsyte research shows less than 20 per cent are mature with their enterprise mobility and realising innovation and productivity benefits.

The leading MDM vendors in Australia, according to Telsyte research, are BlackBerry (following the acquisition and integration of Good Technology), IBM and Samsung in that order.

The growth in MDM is being driven by a high rate (86 per cent) of enterprises still concerned about the security of enterprise mobility.

This includes inadequate separation between work-related use and personal use of a device and the security of devices that have access to corporate information but are not corporately managed.

For further information on the study or media enquiries contact:

Rodney Gedda
Senior Analyst
Tel: +61 2 9235 5891
Email: rgedda@telsyte.com.au

The Telsyte Australian Enterprise Mobility Market Study 2017 is a comprehensive study which provides subscribers with:

The size of the enterprise mobility market and what is it forecast to reach in 2020
The market split between mobile devices, software and services
The market penetration for mobile device management
How organisations procure mobile devices
How organisations are using MDM to manage and secure mobile devices and apps
The state of BYOD (including wearables) and BYOA (apps)
How people work outside the office, including remote locations
Are organisations adopting wearable computers and how they are viewed by CIOs
How mobility is impacting sales and operations
Is the CIO losing control of enterprise mobility?

In preparing this study, Telsyte used:

An online survey of a representative sample of 257 Australian CIOs, IT managers and enterprise mobility managers in August 2016.
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.

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. Telsyte is an independent business unit of DXC.

Smartwatch market gathering steam as Australians turn to wearable gadgets amid flat smartphone sales

September 6, 2016

Smartwatch sales now make up a third of all smart wearables sold

SYDNEY, AUSTRALIA – After a modest start, smartwatches are starting to make their way into Australian consumer’s shopping lists and sales are up, according to a new study by emerging technology analyst firm Telsyte.

New findings from the Telsyte Australian Smartphone & Wearable Devices Market Study 2016-2020 shows smartwatch sales grew by 89 per cent in H1 2016 compared to H1 2015, and now make up one third of the smart wearable device category. Overall, more than 1 million smart wearable devices were sold during the same period.

Apple Watch is the leading smartwatch brand with greater than 50 per cent market share followed by Samsung Gear and Fitbit Blaze.

“As smartphone replacement cycles have lengthened, consumers are turning to other gadgets and smartwatches have started to capture the imagination,” Telsyte Managing Director, Foad Fadaghi says.

“We might be seeing the beginning of a substitution effect where consumers are choosing a smartwatch over a new smartphone,” Fadaghi says.

Telsyte estimates that one in three smart wearables sold in the first half of 2016 were smartwatches compared to less than a quarter in 2015.

A number of factors are driving the smartwatch market growth according to Telsyte, including:

Australians focusing on health and fitness, with many upgrading to smartwatches from smart fitness bands such as those produced by Fitbit and Garmin. Telsyte research shows that 47 per cent of smart wearable users exercise a minimum equivalent of 30 minutes walking per day compared to 30 per cent for the general public.
Price reductions and greater availability through carrier channels, including bundles and repayment plans that make buying a smartwatch easier and more affordable.
More stylish designs and options for watch faces and bands that have greater appeal to both genders.
Mobile contactless payments using a smartwatch (such as Android Pay, Samsung Pay and Apple Pay) can make the payment experience faster than with a card or smartphone.

“The killer apps for early adopters of smartwatches seem to be fitness apps and mobile payments,” Fadaghi says.

Telsyte forecasts 37 per cent of Australians will be wearing a smart wearable (both bands and smartwatches) by 2020, with a substantial increase in sales in 2017 and 2018 driven by the arrival of a second generation Apple Watch, continued price decreases and more uptake of mobile payments on Apple and Android compatible wearables. Telsyte estimates 14 per cent of Australians (all ages, approximately 3.5 million) currently wear a smart wearable device of some sort.

Apple expected to bounce back with iPhone 7

Australian smartphone sales in the first half of 2016 were flat (up only 3.8 per cent) according to Telsyte, with 3.8 million units sold compared to 3.7 million in the same period last year.

Android device sales accelerated with 62 per cent of unit sales in H1 2016 compared to 55 per cent in H1 2015. Both ends of the Android market grew with premium models such as the Samsung Galaxy S7 variants and the Huawei Nexus 6P attracting high-end buyers, while late adopters, or consumers that have typically retained their regular mobile phones for as long as possible, gravitating to lower end models.

In H1 2016, the market leaders (in order) were Samsung, Apple and Huawei, together totalling 79 per cent of all units sold. Despite the slowdown in Apple sales in H1 2016, Telsyte believes Apple sales will bounce back in H2 with the arrival of the iPhone 7, and expected price decreases on older Apple models (e.g. iPhone 6S).

Telsyte also forecasts the arrival of the iPhone 7 will unleash a wave of hand-me-down and second hand older model iPhones which might impact the sales of sub-premium Android models throughout the next 12 months.

Overall, Telsyte forecasts annual smartphone sales to remain similar to 2015, if Apple can impress consumers with its iPhone 7 and attract buyers to its major product refresh that typically happens every second year.

“Android had a good run in the first half of 2016, however trend and purchase intention data indicates Apple consumers are on the verge of an iPhone upgrade cycle,” Telsyte Senior Analyst, Alvin Lee, says.

For further information on the study or media enquiries contact:

Foad Fadaghi, Managing Director, Tel: +612 9235 5851, ffadaghi@telsyte.com.au or
Alvin Lee, Senior Analyst, Tel: +612 9235 5890, alee@telsyte.com.au

The Telsyte Australian Smartphone & Wearable Devices Market Study 2016-2020 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, usage, platforms and operators
Purchase intentions and acquisition channels
Device profiles and Telsyte analyst ratings of tested devices

Telsyte measures smart wearable devices in the Telsyte Australian Smartphone & Wearable Devices Market Study 2016-2020 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 of a representative sample of Australians 16+ years of age conducted with 1,097 respondents in July 2016. An additional 394 Australian respondents, 16 years of age and older were surveyed to specifically determine smartphone, smart wearables and tablet purchases made between January 1 2016 to June 30 2016
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, as well as regular interactions with leading Australian financial analysts that track retail and telecoms companies listed on the ASX. 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

Half of all Australian smartphones on fast 4G

August 2, 2016

Price is the number one driver when it comes to switching mobile service providers

SYDNEY, AUSTRALIA – BYO mobile plans are set to further shake up Australia’s mobile services market, resulting in less long term subscriptions, according to emerging technology analyst firm Telsyte.

With an estimated over 25 million handheld mobile services in operation (SIO) at the end of June 2016, more than half of handsets are now on non-contract plans leaving the door open for more movement between carriers.

Among those who switched mobile service providers in 2015, two thirds opted for non-contract plans, an increase of more than 10 per cent over 2014.

Telsyte believes Telstra’s high-profile network outages in the first half of 2016 combined with more competitive 4G plans available in the market will encourage mobile handset service subscribers to shop around.

Slowing mobile services growth

Telsyte predicts M2M and secondary devices will be the main drivers for future market growth towards 2020 while the increase of handset SIO (Services in Operation) will be limited to net population growth as the market is highly mature.

However, non-handset SIOs typically have lower ARPU (Average Revenue Per User) and do not contribute as much profit per service when compared to handsets.

This might impact the profitability of carriers. Telstra is particularly vulnerable as it has experienced some of the lowest net SIO additions from handsets ever during six month to December 2015 and some 71 per cent of its new services came from lower ARPU machine-to-machine (M2M) connections.

While Telsyte estimates Telstra will maintain a strong lead in the M2M (machine-to-machine) market, other service providers are likely to attack their handset market share aggressively.

Telsyte Senior Analyst for mobile services Alvin Lee, says despite the healthy growth, M2M services only accounted for less than 5 per cent of overall mobile services revenue.

Telsyte research is showing price remains the number one reason for switching carriers and more than half of consumers considering changing MSP are driven by price. Lee predicts price competition will likely see ARPU starting to decline for more MSPs in the second half of 2016.

4G crosses the halfway mark

Telsyte research shows that 52 per cent of mobile SIOs are now on 4G networks, with penetration expected to reach 85 per cent by 2020.

With more than half of all smartphone services using 4G services, there will be more competition around delivering services to consumers that can make use of faster download speeds and larger download allowances such as streaming music, video and games.

The ability of networks to tap into growing mobile trends such as Pokémon Go and live streaming will help grow data utilisation by consumers. In 2015, the average growth of data allowances was 76 per cent, however data usage only grew by 45 per cent.

Telsyte estimates that 2 million Australian smartphone users had downloaded Pokémon Go by the end of July 2016.

For further information on the report or media enquiries contact:

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

Editors please note, Telsyte will not be publicly supplying individual service provider estimates.

Telsyte’s Australian Mobile Services Market Study 2016 is a comprehensive study which provides subscribers with:
Market sizing and forecasts of the Australian mobile services market
Analysis of current offerings in the market
Carrier performance and review
End-user trends and strategic discussions
Mobile services market KPI

In preparing this study, Telsyte used:

Interviews conducted with executives from service providers, mobile operators, content providers and channel partners.
An online survey of a representative sample of Australians 16+ years of age conducted with 1,075 respondents in November 2015.
Financial reports released by service providers.
On-going monitoring of local and global market and vendor trends.

About Telsyte