The Australian smartphone market dropped 9% for the 2018 year with predictions of more negative growth this year.

The Australian smartphone market is in the middle of a perfect storm that sees spiraling flagship prices and the uncertainty of 5G dramatically affecting sales.

GadgetGuy has been following the issues and sees very lean times from flagship phones. The real action is in the sub-$500 price bracket.

Australian smartphone market

 John Riga, market analyst for mobile phones at IDC, says

“An overall lack of innovation and improvement in smartphones in recent years is extending replacement cycles. This is in line with the trend seen in other developed markets, where many consumers are holding off on upgrading to the latest device. At a local level, economic factors also drove this decline, with falling consumer sentiment indicating lower demand and minimal real wage growth limiting household disposable income.”

And 5G shock says Riga is factor number two

“Given the high price point likely to be attached to these devices, they will take time to gain a significant foothold in the market. For this reason, while they may generate some consumer enthusiasm, it is unlikely they will significantly impact the struggling mobile phone market”.

But there is some light at the end of the tunnel, and it’s not an oncoming train

Alcatel MD Sam Skontos thinks the overall decline is less about the lack of innovation and more about pricing, with some vendors taking advantage of Australian consumers for too long.

Australian smartphone market

IDC recognises Alcatel as the number three smartphone vendor by volume in the Australia market, a position that it reinforced throughout 2018. It has been the number three vendor by volume for 3.5 years or 14 consecutive quarters. It mainly supplied the pre-paid and outright markets with excellent handsets costing from $100 to $300.

Sam Skontos, VP and Regional Managing Director, South East Asia & Pacific, for Alcatel said

 “The pricing on smartphone devices is simply getting ridiculous, and consumers are now clearly seeing that highly-featured phones do not need to cost the same as a large screen 4K television or around the world airfare. While the market overall decreased significantly, we experienced a record year off the back of bringing affordable innovation to Australians.”