Australian smartphone sales remained flat spot in the second half of last year despite soaring usage rates, according to a newly released market study.
New findings from the Telsyte Australian smartphone & wearables devices market study 2017 showed 4.1 million smartphones were sold during the second half of 2016, a drop of 2% - or 0.1million - compared to the second half of 2015.
Year-on-year the market grew less than 1% and, according to the telecoms research firm, sales were impacted by a combination of factors including the recall of the Samsung Note 7, rising prices of premium handsets, and a difficult retail environment.
At the end of 2016, Telsyte estimates that 75% of Australians were using a smartphone, with near full penetration in the 18 to 55-year-old age group.
{loadposition peter}“The smartphone has quickly become the go-to device for Australians’ digital lifestyles,” Telsyte notes, with the study findings show that:
• 3 in 4 smartphone users streamed music, video or both to their device during 2016, as mobile data caps increased and more than half of all mobile phones were connected via 4G
• Around 30% of all eCommerce (online purchases of physical goods and services) were conducted via post-PC devices (smartphone & tablet), up from 22% in 2015 (averaged across 23 measured product and service categories)
• Services such as ride sharing, food ordering and delivery services that are primarily accessed via smartphone apps are growing strongly. Over 2 million Australian smartphone users used online food order and delivery services in 2016 and 1.7 million used a ride or car sharing service.
• 1 in 4 smartphone users indicate that they “feel addicted to their smartphone”.
Not surprisingly, the study found that Apple’s iPhone was the most popular brand of smartphone sold in Australia with an estimated 1.7 million units sold in H2 2016.
But, Telsyte says it believes Apple was not able to replicate its H2 2014 performance which covered the period following the launch of the iPhone 6, triggering a major upgrade event due to its larger screen size.
Telsyte says it believes price rises have also impacted iPhone sales.
The research firm observes, however, that iPhone repeat purchase intentions remain industry leading at greater than 80%, creating a big opportunity for Apple if it can deliver a “compelling new product at the end of 2017”.
“A third of the iPhone installed base is on the iPhone 5S or earlier models, making them ripe for an upgrade,” Telsyte senior analyst, Alvin Lee, says.
Lee says Telsyte anticipates that an iOS upgrade in 2017 will result in models such as the iPhone 5 and iPhone 5c being left unsupported.
The firm also says that Android remains the most popular operating system on smartphones in Australia (52% of the installed base), with Samsung continuing its Android sales leadership followed by Huawei.
According to Telsyte’s, the recall of Galaxy Note 7 has negatively impacted Samsung’s brand for only around a third of Samsung’s smartphone users, with Samsung smartphone users indicating around 60% repeat purchase intention, similar to before the recall.
Telsyte also says smartwatch sales are set to overtake smart fitness bands in 2017.
The research firm estimates nearly 2 million wrist-based wearables were sold in 2016, of which 37% were smartwatches.
Telsyte says it expects by the end of 2017 over half of all wrist-based wearable sales will be smartwatches, as more basic smart fitness band sales decline in sales.
“Telsyte estimates that smart fitness band sales in Australia were down 10% year on year, and down 28% in H2-2015 compared with H2 2016.
“Around 1 in 6 smart fitness bands are given as gifts in Australia which is impacting longer term usage rates,” Telsyte damaging Director, Foad Fadaghi, says.
Telsyte believes mobile payments are quickly becoming the “killer application” for smartwatches.
Telsyte surveys show that almost half of Apple Watch owners have used Apple Pay, with more than 70% indicating they use it “regularly” or “almost always” – while in comparison, less than 10% of iPhone users in Australia that have a compatible handset have used Apple Pay.
“Once users get over the initial barrier of raising a smartwatch to a payment terminal, they start to use it regularly, indicating it might be a critical application for smartwatch retention,” Fadaghi says.
Finally, Telsyte research shows that the number one requested smartwatch feature is longer battery life.