Technology analyst firm Telsyte has found that Australian smartphone sales fell one million year-on-year in 2015 with price rises and less upgrades impacting the maturing market.According to the Telsyte Australian Smartphone and Wearable Devices Market Study 2016, Australian smartphone sales totalled 7.9 million last year, down 11 per cent from 8.9 million in 2014.
However, Telsyte expects sales to rise again this year, forecasting 8.4 million units will be sold “due to an anticipated major iPhone refresh, a stronger line-up of Android-based handsets and new smart accessories that complement latest smartphones, such as virtual reality headsets”.
Android led the market by units sold in the 2015 second half, commanding a 49 per cent market share, followed by iOS with 46 per cent and other platforms at 5 per cent, with the leading brands Apple and Samsung, while Huawei also put in a strong showing with its Nexus 6P offering.
“The Australian smartphone market had a cyclical downturn in 2015, but revenues remained steady offset by price rises,” Telsyte managing director Foad Fadaghi observed.
Only 860,000 new smartphone users were added in 2015, down from 1.87 million in 2014, pointing to the market nearing saturation, Telsyte found.
Telsyte expects a similar number of new users this year, with the figure nearing the natural net population growth by 2020 (approximately 400,000 to 500,000 people per year).
Telsyte believes there were 17.6 million Australian smartphone users at the end of last year, however estimates 3.5 million Australians are still using regular mobile phones, noting that it expects the smartphone market will receive a boost as Telstra and Optus decommission their 2G networks in 2016 and 2017, requiring those on older handsets to upgrade.
Telsyte research additionally shows that around half of iPhone users have yet to upgrade to the iPhone 6 (or later) models, despite the iPhone retaining a greater than 80 per cent repeat purchase intention among its users, with Telsyte stating it believes some of this market will be best addressed with a more affordable and possibly smaller form factor model expected to be announced early this year.
“It is getting harder to get consumers to upgrade their smartphones,” Fadaghi commented. “Manufacturers will need to give customers more reasons to upgrade in 2016 than the end of mobile service contract, or larger screen size.”
Meanwhile, Telsyte has found that the adoption of health and fitness apps, along with health-orientated lifestyle choices by Australians, is driving a boom in smart wearable devices, which are now used by more than 2 million Australians (16+ years of age).
Telsyte predicts that by 2020 around a third of the population could be wearing a smart wearable device on their wrists.
Lower-cost smart wristbands continue to dominate the smart wearables market, with Telsyte estimating approximately 76 per cent of the 944,000 units sold in the 2015 second half were smart wristbands, while smartwatches have been less successful in attracting mainstream buyers.
Telsyte’s research shows that current smartwatch users are twice as likely to want to “stand out in a crowd”, three times more likely to “always keep up with the latest technology developments” and five times more likely to “feel pressure to buy the latest gadgets” than the average Australian consumer.
“Smartwatch user profiles suggests the market is still only drawing in early adopters of technology,” Telsyte senior analyst Alvin Lee commented. “However, the lines are blurring as more affordable smart wristbands are offering features that were previously only available on smartwatches.”
According to Telsyte, Apple led the Australian smartwatch market last year, followed by Samsung and LG.