Market Update, 2018

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 smart phones 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 smart phones 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.




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