Aussie tablet sales fall 28% as Android ekes past Apple

Australian tablet sales fell 28% during the first half of the year, putting an end to three solid years of market growth, according to research firm Telsyte.

There were 1.8 million tablets sold across the country during the period, with Android-based tablets outselling iPads for the first time, the company estimates.

Population penetration of media tablets increased to 46% - or 10.8 million people - at the end of June, Telsyte said. There were also signs that consumers are waiting for a reason to upgrade, causing a market lull exacerbated by the traditionally slower retail cycle of the first half of a year.

Android took a 47% share of the market for the first time, narrowly ahead of Apple at 46%. But Apple remained the most popular individual tablet vendor and the iPad 2 remained the most popular tablet in use.

Telsyte Managing Director Foad Fadaghi said he expected Android’s lead in the market to be short-lived. “Apple should have a strong second half if it can bring upgraded models to market and benefit from a halo effect created by the iPhone 6 launch,” he said, predicting that Apple will return to the top during the period.

“More than half of iPhone users already have an iPad; whether consumers upgrade both this year will be the question many will be asking.”

The factor that has pushed Android to the top has been the influx of low-end, low-cost devices into the market, Telsyte said.

But this strength is also a weakness, as the low-end devices are putting pressure on premium Android tablets from Samsung and other vendors. It also means that despite capturing the largest share of sales, Android tablets accounted for only a third of total market revenue.

Looking ahead to the second half, Telsyte said sales are expected to pick up relative to the first, with a projected 2.1 million unit sales. But several factors will continue to inhibit demand.

The launch of the iPhone 6 and other new-generation smartphones will be one such factor, with Telsyte predicting that demand for smartphones will be around three times greater than for tablets during the half-year ahead.

The iPhone 6 era could impact demand for tablets in another way. Telsyte said its research shows that the introduction into the market of ‘phablets’ - smartphones with large screens that blur the lines between phones and tablets - has so far only had a marginal impact on consumer interest in tablets. Consumers using a phablet are only 5% less likely than standard smartphone users to be intending to purchase a tablet.

But the firm noted that all this could change following the widely expected introduction of a large-screen iPhone 6 model.

Analysts have been forecasting record sales for the new iPhone models, which have yet to be formally announced. Stock market anticipation for the sales rush pushed Apple stock to a new all-time high of US$100.53 ($108.22) per share during Tuesday’s trading.

Image courtesy of Michael Coghlan under CC