Telsyte research reveals smart device trends

The sale of smartwatches has grown by 89%, according to a study undertaken by Telsyte.

New findings from the Telsyte Australian Smartphone & Wearable Devices Market Study 2016–2020 indicate that smartwatches now comprise one-third of the smart wearable device category. Overall, more than 1 million smart wearable devices were between H1 2015 and H1 2016.

Apple Watch is the leading smartwatch brand, with more than 50% of the market share. This is followed by Samsung Gear and Fitbit Blaze.

“As smartphone replacement cycles have lengthened, consumers are turning to other gadgets and smartwatches have started to capture the imagination,” said Foad Fadaghi, Telsyte managing director.

“We might be seeing the beginning of a substitution effect where consumers are choosing a smartwatch over a new smartphone.”

Telsyte estimates that one in three smart wearables sold in the first half of 2016 were smartwatches, compared to less than a quarter in 2015.

The research undertaken by Telsyte indicates that Australians are focusing on health and fitness, with many upgrading to smartwatches from smart fitness bands such as those produced by Fitbit and Garmin. It suggests that 47% of smart wearable users exercise a minimum equivalent of 30 minutes walking per day, compared to 30% for the general public.

In addition, price reductions and greater availability through carrier channels, including bundles and repayment plans, are making the purchase of a smartwatch easier and more affordable. There are also more designs and options for watch faces and bands that have greater appeal to both genders.

Mobile contactless payments using a smartwatch (such as Android Pay, Samsung Pay and Apple Pay) can make the payment experience faster than with a card or smartphone.

“The killer apps for early adopters of smartwatches seem to be fitness apps and mobile payments,” said Fadaghi.

Telsyte forecasts that by 2020, 37% of Australians will be wearing a smart wearable (both bands and smartwatches). A substantial increase in sales in 2017 and 2018 is expected to be driven by the arrival of a second-generation Apple Watch, continued price decreases and greater uptake of mobile payments on Apple and Android compatible wearables. It is estimated that 14% of all Australians currently wear some type of smart wearable device.

Australian smartphone sales in the first half of 2016 were flat, with 3.8 million units sold compared to 3.7 million in the same period last year.

Android device sales increased, with 62% of unit sales in H1 2016 compared to 55% in H1 2015. Both ends of the Android market grew, with premium models such as the Samsung Galaxy S7 variants and the Huawei Nexus 6P attracting high-end buyers, while consumers that have typically retained their regular mobile phones for as long as possible gravitated to lower end models.

In H1 2016, the market leaders were Samsung, Apple and Huawei, together totalling 79% of all units sold. Despite the slowdown in Apple sales in H1 2016, Telsyte believes Apple sales will bounce back in H2 with the arrival of the iPhone 7 and expected price decreases on older Apple models.

Telsyte also forecasts the arrival of the iPhone 7 will create a wave of hand-me-down and second-hand older model iPhones, which might impact the sales of sub-premium Android models throughout the next 12 months.

Overall, Telsyte expects annual smartphone sales to remain similar to 2015, if iPhone 7 proves popular with consumers.

Image credit: ©stock.adobe.com/au/Maksym Yemelyanov