Australian smartphone market stagnating

The Australian smartphone market is in decline due to the high cost of new devices, according to new research from Telsyte.

The Australian technology analyst firm estimates that total smartphone shipments fell 3% during the second half of 2018 to 4.6 million units.

Consumer demand is being muted in part due to a rise in the cost of devices — the average selling price of smartphones increased by 13% from 2017 and 2018 — as well as an extended upgrade cycle, the company said.

According to Telsyte’s research, as many as one in four consumers plan to hold off on buying a new smartphone until 5G becomes available, and a further 33% of Australians indicated that 5G capability will be important when choosing a smartphone.

But with initial global 5G rollouts focusing on the provision of fixed wireless home broadband services, only a handful of Android handset vendors are expected to release 5G smartphones in 2019, with the mainstream launch window not expected until 2020.

As a result, Telsyte expects total Australian smartphone sales to increase by just 1% in 2019 to around 9 million units.

But if Apple defies expectations and releases a 5G iPhone during its usual timeframe for introducing new devices this year, this could lift total sales to 9.4 million, which would represent a growth rate of nearly 6%.

Despite the cost increases and flat sales, Telsyte noted that smartphone usage and dependency is at an all-time high.

More than 20 million Australians are now using a smartphone, the company estimates, with around 9.1 million of these being primarily iPhone users compared to around 11 million Android users.

Meanwhile, 54% of premium smartphone users claim that their smartphone is now their main digital device, and nearly half of all mobile payment users are now using the technology more than 75% of the time to pay for goods and services.

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

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