The Telsyte Australian Smartphone and Wearable Devices Market Study 2019 shows that as iPhone prices went up, sales nosedived. And, users are holding onto 4G smartphones longer to see what 5G really means.
Telsyte is a respected research company – one of the few that focuses on Australia. Its Market Study 2019 comes from a representative sample of 1,025 respondents, and a range of manufacturer and analyst supplied statistics.
It does not purport to be a ‘ship-in’ sales analysis but mixes consumer sentiments with local sales (sell-out) and other information to extrapolate what the market is. Telsyte is usually right!
Price up and demand down
Sales of 4.6 million smartphones in the second half of 2018 were down 3% from the same period in 2017. Why?
Consumers are holding onto their 4G handsets longer to see how 5G affects them. And, with surging prices of new models, it makes sense to hold onto the 4G for another year or so.
Telsyte research found the average selling price (ASP) of smartphones went up by 13% between 2017 and 2018, impacting consumer demand. Apple drove most of the increases – others simply followed.
Despite huge price rises Apple maintains an 85% repeat purchase intention rate with the next being Samsung (70%).
Interestingly Telstye says the Australian market in H2, 2018 was Apple 42% (9.1 million users) and Android at 58% (11 million users). That is at odds with ‘ship-in’ research and shows that there are truckloads of unsold iPhones sitting in warehouses.
In the Android smartphone market, the top three vendors were Samsung, OPPO and Huawei.
5G anticipation may slow market growth
Those looking to replace a smartphone in 2019 will wait to see what 5G means to them. Can they get 5G, is it necessary and how much extra will it cost? Telsyte says 24% of consumers will wait to buy a 5G device and 33% say that 5G will drive their next purchase.
Foad Fadaghi, Telsyte Managing Director, says, “There is a clear imperative for carriers to bring 5G handsets to market as soon as possible given the lengthening of the replacement cycle. Despite 5G mobile services not yet available currently in Australia, we believe consumers will want to ‘futureproofing’ their next purchase, given they anticipate using the same handset for the next three years or longer.”
Sales down but use up!
Smartphone dependency is at an all-time high. 54% of premium smartphone users (handsets costing greater than $600) claim that their smartphone is their main digital device. This is similar to trends in Asia where premium, larger screen (we used to call them phablets) are the primary onramp to the internet.
A fast-growing area of smartphone usage has been mobile payments. 46% of all mobile payment users claim to use it more than 75% of the time.
13% of Australians aged 16 to 34 (‘millennials’) have changed or joined a new banking provider due to the lack of mobile payments support, and 14% of Apple Watch users have also done so.
Smart speakers accelerate
1.6 million (16%) of Australian households now use smart speakers (such as Google Home, Amazon echo and Apple HomePod) in H2, 2018, up from 538,000 (or 6% of households) in 2017.
In Australia, Google is leading the smart speaker market with 72% in Australian households.