Mobile allowances boom as consumers seek unlimited fixed and mobile data

April 23, 2018

More than 10 million 5G mobile connections expected in Australia by 2022

SYDNEY, AUSTRALIA – The Australian mobile services market is expected to enter the realm of 5G in 2019, quickly changing the current market dynamic driven by price competition, according to new research from emerging technology analyst firm Telsyte.

The Telsyte Australian Mobile Services Market Study 2018 found 616,000 new SIO (Services In Operation) were added during the 6 months to December 2017, ending the period with a total of 34.2 million SIO.

The market collectively achieved similar net growth compared to the same period in 2016 (593k), with handsets being the main driver followed by machine-to-machine (M2M) connections and mobile broadband. Telstra and Mobile Virtual Network Operators (MVNOs) combined had the largest growth, contributing more than 70 per cent of the total net SIOs additions.

Telsyte estimates the number of 5G connections will reach over 10 million by the end of FY2022 and at least one network operator will begin shutting down 3G services by 2020. The arrival of 5G is set to enable further innovation in mobile services plans and bundled services, helping create differentiation in the market for MNOs.

The study also found competition in the BYO handset market is intensifying and consumers are benefiting from much better deals across the board compared to a year ago. Mobile Network Operators (MNOs) have substantially increased mobile data inclusions on their BYO contract plans, putting pressure on MVNOs.

The average data allowance on mobile plans grew by more than 100 per cent in 2017 while average data usage on smartphones only grew by 49 per cent. Consequently, Telsyte found that around half of the average data allowance per user was utilised in 2017, down from 67 per cent in 2016.

Telsyte research shows, 1 in 3 (32%) still feel they are paying too much for their current mobile services. Those that have exceeded their monthly data allowance at least once during 2017 were twice as likely to intend to change their service provider than the average.

Staying connected now critical for consumers

Mobile connectivity is now critical to most Australians. More than 1 in 4 Australians were forced to tether to their mobile connection in the last 12 months due to a slow, or non-working, fixed broadband connection at home or work. Amongst those forced to tether, 32 per cent said they are likely to upgrade their mobile data limit.

However, despite this behaviour the consumption of fixed broadband data showed no sign of slowing down with usage expected to continue to grow at around 40 per cent per annum.

Two-thirds of Australian smartphone users with fixed broadband at home claim that they would use their fixed broadband just as much, even if they had access to unlimited (or very large) mobile data. Only 11 per cent say they will decrease their fixed line usage by more than 50 per cent or stop using it altogether.

Telsyte believes a simple unlimited “any connection” option will be popular going forward as consumers become increasingly dependent on their digital devices, regardless of whether it connects via the mobile network, or a fixed line network.

“The market is conditioning people to consider and pay for different access technologies separately, but ultimately consumers just want their Internet to work, anywhere at any given time, on all their digital devices,” Telsyte Senior Analyst Alvin Lee says.

Telsyte believes more personal and household devices will be connected to the mobile networks when consumers are introduced with the “easy to connect” methods, such as those based on eSIMs.

eSIMs the catalyst for disruption

eSIMs are integrated SIMs in digital devices such as smartphones, wearables, tablets and other Internet-connected devices. Devices with eSIMs can be connected to supporting cellular networks with a simplified process and without requiring a physical SIM card. They also can reduce the internal space required, a critical advantage for smaller devices such as wearables. Currently the Apple Watch Series 3 LTE is the main device utilising this technology.

Telsyte’s research shows eSIMs are more likely to encourage Australians to connect additional devices to mobile networks. With the current low levels of data utilisation on mobile services, nearly 1 in 2 Australians (45%) are interested in connecting their personal and household devices to mobile networks if they are eSIM enabled. The most immediate opportunities are with laptops and tablets where around a third of Australians are interested in connecting via an eSIM.

While eSIMs present opportunities for carriers, they also have the potential to increase churn with most operators cautiously adopting this technology.

For further information on the report or media enquiries contact:

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

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

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

Telsyte’s Australian Mobile Services Market Study 2018 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, device manufacturers and channel partners.
An online survey of a representative sample of Australians 16+ years of age conducted with 1,162 respondents in November 2017.
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.

Australian organisations struggling to keep up with big data privacy challenges

April 19, 2018

4 in 10 companies unsure they are not ‘being creepy’ using customer data

SYDNEY, AUSTRALIA – The benefits of big data analytics have been too good to resist for most Australian organisations; however, many are struggling with privacy implications and the ethical use of data, according to new research from emerging technology analyst firm Telsyte.

The Telsyte Big Data and Analytics Study 2018 found around 80 per cent of organisations in Australia with more than 20 employees have a big data strategy, although many are in the embryonic stages with pilot programs and exploratory projects.

Despite this growing wave of investment in big data, only 61 per cent of businesses were conscious of privacy and regulatory concerns around big data, even with the Notifiable Data Breaches (NDB) scheme coming into effect in February 2018, and the European Union's (EU) General Data Protection Regulation (GDPR) coming into play in May.

Furthermore, many (38%) are struggling with the ethical use of customer data and are unsure if they are being “careful not to be creepy”. Concerns include handling of sensitive data which customers might have shared without understanding what they had consented to, such as during the installation of mobile apps or signing up to free web-based services (e.g. social media sites and email services).

“There is a huge temptation to highly target and customise offers to individuals, but also predict behaviours which generate profits,” Telsyte Managing Director, Foad Fadaghi, says.

“However, many have had to draw the line at how sensitive customer data, such as location movements, or passively scraped data is used to target customers,” Fadaghi says.

Despite self-imposed regulation, nearly two thirds (65%) of organisations claim they protect data like other assets (e.g. physical or IP assets) and around half (53%) are willing to share data if there is tangible benefit to their organisation.

Overall, 84 per cent of business and technology leaders saw an improvement to their organisation by using big data analytics. Productivity and improved decision making were rated highly, as was the ability to improve customer intelligence, and control operating costs.

CEOs and chief data leaders becoming critical for big data success

The CEO and CDO (Chief Data officer, sometime called Chief Data Scientist) are becoming the main sponsors of big data strategies in Australian companies.

About 1 in 3 (35%) organisations have the CEO leading big data strategies, as the decision-making role of the CEO is becoming less about ‘gut feel’, but rather about data-driven and an informed process that can be reviewed by the board.

Telsyte research shows that companies with CDOs or CEOs spearheading efforts are much more likely to have an organisation-wide digital strategy, or the ability to break down silos of data that might sit across various business units.

This addresses the fastest growing challenge relating to the adoption of, and use of, big data - the lack of a standard, organisation wide approach (28%). This is a challenge which is cited by twice as many companies than it was in 2016 (14%).

Other challenges include the cost of big data software or services (31%) and lack of in-house skills (25%)

The main drivers for big data analytics adoption include digital transformation (58%), customer behaviour measurement (44%) and e-commerce applications (36%).

Security and fraud detection is growing in popularity amongst organisations with a big data strategy and is now in use by over 40 percent of organisations.

MSPs and training running hot as customers seek skills

With a lack of skills and high cost of entry holding some organisations back, Telsyte research shows service providers are the big winners for delivering big data analytics capability.

Around a third of companies with a big data strategy are using a big data managed service provider (or outsourcers) compared to around a quarter a year ago, which is ideal for companies struggling to acquire big data skills.

To plug the capability gaps, over one-third of businesses are investing in big data training for staff, which has seen a mini-boom during the last two years.

For further information on the study or media enquiries contact:

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

Telsyte’s Big Data and Analytics Study 2018 is a comprehensive study 45-page study that provides subscribers with:

The adoption and maturity model of big data in Australian organisations
Australian organisations’ IT priorities and spending relating to big data and analytics
The increasing role of CEOs and CDOs in big data strategy
Big data user trends across usage models, vendors used, and the drivers and challenges of big data
Demand for different big data use cases
Industry sector analysis and trends in big data
Industry sector analysis includes retail, healthcare, banking & finance, Information communications & media and public sector & government

In preparing this study, Telsyte used:

Telsyte’s technology decision maker survey with a representative sample of 319 respondents across Australian organisations with greater than 20 employees.
Sampling was conducted on a company size by number of employees weighting basis, with around half of respondents coming from organisations with greater than 200 employees.
Interviews with Telsyte’s extensive network of big data service providers, big data analytic vendors, and cloud providers
On-going monitoring of local and global market and vendor trends.
Financial reports released by public big data vendors and their partners

About Telsyte

Australian tablet sales stabilise as market enters new phase of maturity

March 28, 2018

Education and enterprise identified as key growth markets

SYDNEY, AUSTRALIA – A total of 1.65 million tablets were sold in Australia during the second half of 2017, a marginal increase of only 1 per cent from the same period a year ago, according to new research from emerging technology analyst firm Telsyte.

Apple iPad sales bounced back in the second half of 2017 compared to a year ago (up 6%), mainly due to a replacement cycle driven by the new budget-friendly 9.7-inch iPad and an overall increase in interest for the iPad Pro series, which has been positioned as a PC replacement device.

The Telsyte Australian Tablet Computer Market Study 2018 found sales of Android-based tablets continued to disappoint, falling by 16 per cent compared to the second half of 2016. Samsung and Lenovo held their positions as the largest Android tablet vendors in Australia, but other device maker have turned their focus to Windows 10 tablets and 2-in-1s in place of Android.

Telsyte’s latest research shows demand for 2-in-1 tablets - or tablets which can also be used as a computing device (with keyboard) - is approaching mainstream acceptance. 2-in-1 tablets accounted for over 40 per cent of total tablet sales during the second half of 2017*, with the enterprise and BYOD segments driving continued market growth.

Sales of 2-in-1 tablets during the second half of 2017 was still predominantly driven by Windows with more Australians considering Windows 2-in-1 tablets when it comes to upgrading their laptops. Windows 2-in-1 tablet sales increased by 13 per cent in the second half of 2017 compared to the same period in 2016. During this period overall Windows tablet sales overtook Android tablet sales for the first time.

Telsyte’s latest tablet research found some 35 per cent of tablet users tether to their smartphones while out and about, as the average smartphone data allowance has more than doubled since 2016.

However, Telsyte believes the big driver for mobility and tablets will come from eSIMs.

eSIMs are integrated SIMs in digital devices such as smartphones, wearables, tablets and other Internet connected devices. Devices with eSIMs can be connected to supporting mobile networks without requiring a physical SIM card.

“The early success of eSIM in wearables such as the Apple Watch 3 LTE can potentially extend to tablets, with simplified and more user-friendly setup for mobile connectivity”, Telsyte Senior Analyst, Alvin Lee says.

eSims have the potential to rejuvenate tablet computer sales as around 1 in 3 tablet and laptop owners show an interest in connecting to mobile networks directly if their device had an eSim that was easy to connect.

Growth in the tablet using audience (or installed based of users) has started to show signs of peaking, with more than 15 million Australians having access to a tablet at the end of 2017. This was up only around 200,000 people over 2016. The Windows tablet audience is expected to surpass Android during 2018.

Telsyte has identified education and enterprise as key growth segments for tablet sales in the next 12 to 24 months.

According to Telsyte’s latest research, tablets remained a critical channel for delivering children’s content, with 4 in 10 parents that own a tablet sharing it with their children. In addition, Telsyte research shows children who use tablets spend up to 2 hours per day on their device.

For further information on the study or media inquiries contact:

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

About Telsyte’s Australian Tablet Computer Market Study 2018

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 Pro models as 2-in-1s for comparison reasons, due to having a specifically designed Apple keyboard which is typically sold together.

Telsyte’s Australian Tablet Computer Market Study 2018 is a comprehensive 74 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.
Tablet audience estimates.

In preparing this study, Telsyte used:

Telsyte’s annual Digital Consumer survey conducted in November 2017 with a representative sample of 1,162 respondents, 16 years and older, and follow-up survey conducted in January 2018 with a representative sample of 1,178, 16 years and older.
Interviews conducted with executives from service providers, network operators, manufacturers, retailers, financial analysts and channel partners.
Financial reports released by mobile carriers, service providers, retailers and manufacturers.
On-going monitoring of local and global market and vendor trends.

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 tablet sales in Australia and has been providing insights on tablet device since 2010.

Please note this study was formerly titled “Australian Media Tablet Market Study”

Companies Adopting Enterprise-wide Digital Strategies Compete Better Amid Increasing Disruption

March 27, 2018

Telsyte has published our latest digital enterprise research study sponsored by DXC.technology.

For further information, including press release, whitepaper and info-graphics please follow the below link to the Press Release:
http://www.dxc.technology/au/press_releases/144534-research_study_companies_adopting_
enterprise_wide_digital_strategies_compete_better_amid_increasing_disruption

Please follow the below link to download the report:
https://www.dxc.technology/au/ahp/144510-digital

For further information on the study or media enquiries contact:

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

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 smartphone sales grow in 2017 as users lock into platforms

February 20, 2018

Mobile payments usage surges, putting banks on Apple Pay notice

SYDNEY, AUSTRALIA Smartphone sales experienced strong growth in 2017 driven by an Android replacement cycle, according to a new study by emerging technology analyst firm Telsyte.

The Telsyte Australian Smartphone and Wearable Devices Market Study 2018 found overall year-on-year smartphone sales were up 11 per cent with 9.2 million units sold.

Telsyte estimates 4.8 million smartphones were sold in the second half of 2017, up 6 per cent from 2H 2016. Android devices made up 55 per cent of all units sold, mainly due to 2017 being a “replacement year” for Android users. There are now some 19.3 million smartphone users in Australia, with 8.6 million using iPhones and 10.3 million on Android (about 0.4 million use other platforms).

The top three Android vendors in H2 2017 were Samsung, OPPO and Huawei.

Apple misses iPhone X factor

Despite a predicted upturn in Apple sales due to the iPhone X (pronounced “iPhone ten”), a significant number of additional sales were not recorded in Australia, mostly due to the high price tag and short time-in-market during the calendar year. Overall, the iPhone 8, 8 Plus, and 7 were the most popular iPhone models in 2H 2017.

Australians paying more for internal storage

Telsyte estimates the average cost of a smartphone in Australia has risen by more than 30 per cent since 2015. One reason for this rise is Australian smartphone users are now seeking models that have more internal storage, which generally cost more. Internal storage is now ranked the fourth most important feature when choosing a smartphone, up from sixth in 2016. Over 70 per cent of smartphone users claim internal smartphone storage is an important factor in their purchasing criteria.

Due to higher investments in smartphones, the average replacement cycle for devices is now closer to three years than the previous two years. Additionally, 44 per cent of smartphone users say the number one reason for not buying a new device is that their smartphone is “still in good condition”.

Despite iPhone sales remaining steady to H2 2017, Apple maintained the highest repeat purchase rate of any brand. Amongst those that use an iPhone and had purchased a replacement smartphone in 2H 2017, around 85 per cent chose to purchase another iPhone. The next highest was Samsung, with more than a 70 per cent repeat purchase rate.

The smartphone operating system is the fifth most important factor to people when choosing a smartphone (up from tenth in 2016), with three quarters of both iPhone and Android smartphone users finding this important.

“As the smartphone market has matured, platform loyalty is at an all-time high, creating almost two unique marketplaces,” Telsyte Managing Director, Foad Fadaghi says.

Apple watches dominates smart wrist wearable sales

Sales of smartwatches exceeded smart wristbands for the first time in Australia (58 per cent smartwatch vs. 42 per cent smart wristbands), with 844,000 smart wrist wearable devices sold in 2H 2017. Overall there was a year-on-year decline in smart wrist wearables dragged down by plummeting fitness band sales, which declined by over 30 per cent.

Conversely, six-month sales of smartwatches grew 29 per cent (compared to 2H 2016), as health and fitness features on smartwatches cannibalise less capable wrist bands. Almost three quarters of smartwatches sold during 2H 2017 were Apple Watches (360,000), compared to just over half a year ago.

Telsyte research shows annual unit sales of Apple Watches have been consistently outselling Swiss watches in Australia since 2016. However, Swiss watch revenues are higher as they often cost more and deliver higher margins for watch retailers(1).

LTE or mobile network connectivity is igniting interest in the smartwatch category. Telsyte research shows almost 30 per cent of Australians are now showing interest in smartwatches that have built-in mobile connectivity. The percentage increases to 51 per cent amongst existing smartwatch users.

Telsyte believes the new Apple Watch LTE (able to connect to mobile networks) version and lower entry prices on other models were the main drivers for the surge in Apple Watch sales during 2H 2017. Telsyte believes Apple exceeded 1 million Watch users in late 2017. Apple and Fitbit are still the market leaders in smartwatch and fitness bands market respectively at the end of 2017.

Mobile payments growing in Australia

Telsyte research shows one in seven (14 per cent) have completed a mobile contactless payment transaction at a payment terminal in store at least once, an increase from 8 per cent in 2016. The increasing adoption in mobile contactless payments is starting to influence Australian’s banking decisions.

Telsyte research indicates Apple Pay has the most potential to change Australians’ banking decisions as Android Pay is more widely supported by major banks in Australia.

“More than half of Apple Watch users in Australia cannot use Apple Pay with their primary bank, creating a climate for ,” says Telsyte senior analyst Alvin Lee.

Around one in five (22 per cent) iPhone users claim they are more likely to bank with a provider if it supports Apple Pay. This figure increases to 32 per cent for those who are also using an Apple Watch.

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 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
Smart location-based item tracker market sizing estimates 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 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:

Telsyte’s annual Digital Consumer 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.

(1)source: Federation of the Swiss Watch Industry FH, nb. sales figures are wholesale prices, Telsyte applies typical luxury watch retail margins for comparisons purposes

About Telsyte