There is a growing appetite for wearable technology and smart speakers in Australia, according to new research.

Telsyte research also shows that 1 in 5 (20 per cent) Australian households at the beginning of July 2019 had at least one smart speaker, up from 16 per cent in December 2018.

According to the Telsyte Australian Smartphone & Wearable Devices Market Study 2019-2023 a total of 1.2 million smart wrist wearables were sold in 1H19, up 22 per cent from 1 million a year ago, mainly driven by increasing demand for smartwatches.

Some 69 per cent of smart wrist wearables sold during the measured six months were smartwatches (830,000).

Apple remained the clear leader in the smartwatch market with close to half (48 per cent) of total smartwatch sales during the six-month period. Other main smartwatch vendors included Samsung, Fitbit, Huawei and Garmin, with all enjoying healthy growth.

As is the case with iPhones, Telsyte’s latest survey recorded a high satisfaction amongst Apple Watch users. Apple Watch had a higher than 90 per cent repeat purchase intention rate.

Telsyte’s research shows the increasing demand for smartwatches has been driven by improved battery life, voice commands, health monitoring and better designed smartwatch apps.

Less than half of existing smart fitness band users plan to buy another one, compared to 85 per cent repeat intention purchase for smartwatch owners, showing a clear shift in market preferences.

“The battle for the wrist wearables market has been won by smartwatches,” said Telsyte Senior Analyst, Alvin Lee.

According to Telsyte’s ongoing research, the average cost of smartwatches has decreased by 22 per cent between 2017 and 2019 compared to an increase of more than 15 per cent for smartphones, tipping the scales in favour of greater smartwatch sales during longer smartphone replacement cycles.

Telsyte’s latest research also shows there is growing interest in smartwatches with built-in mobile connectivity such as those enabled by eSIMs – especially amongst smartwatch users (53 per cent of current smartwatch users versus 22 per cent of total Australians aged 16 and over).

Smartphone sales

In terms of smartphones, Australians are waiting longer to update their devices. The Telsyte Australian Smartphone & Wearable Devices Market Study 2019-2023 found just over 4 million smartphones were sold in the first half of 2019, down 6 per cent compared to the same period a year ago.

The slowdown was mainly due to a prolonging iPhone replacement cycle and anticipation of greater availability of 5G smartphones in the second half of 2019 and through to 2020.

The study found among those that purchased their smartphones outright, the average replacement cycle is now almost 3 years, with iPhones having a 25 per cent longer replacement cycle compared to Android.

The ability to maintain newer operating systems on older handsets has seen iPhones average replacement cycle increase by 30 per cent to around 3.2 years. Android replacement cycles also increased by 11 per cent during this period, to around 2.6 years.

Sales of iPhones declined by 13 per cent during the measured 6 months to 1.7M while Android sales remained stable at 2.3M.

Apple remained the top vendor overall and the top three Android vendors during the measured period remained Samsung, OPPO and Huawei. Sales of Android was driven by increasing demand of mid-range smartphones and bundles (e.g. with a smart speaker or with a smartwatch).

Despite declining iPhone sales in 1H19, Apple maintained the highest repeat purchase rate (greater than 90 per cent). Samsung and OPPO’s brand loyalty (measured by repeat purchase rates) have both increased and are leading amongst Android smartphone vendors.

It is worth noting OPPO improved the most, jumping from 6th to 3rd overall in terms of repeat purchase intention rates, as the vendor continued to hold its position in the tightly contested Android market.

Source: Telsyte Australian Smartphone & Wearable Devices Market Study 2019-2023

Consumers wait for 5G

5G mobile technology is being rolled out across Australia, promising speeds up to 1Gbps and beyond. Many consumers are aware of this and are making purchasing decision based on the availability of this technology, both to “future-proof” and maintain resale value. The lack of 5G support is likely to impact the demand for iPhones in next 12 months.

Telsyte however anticipates at least one iPhone model to be released in 2020 that will support 5G.

With a large selection of 5G smartphones expected in 2020, annual sales of smartphones could potentially reach the peak levels last seen in 2017 where over 9 million smartphones were sold in Australia.

“All the evidence is suggesting that we are set for a super cycle in 2020 as consumers replace aging 4G handsets,” said Telsyte Managing Director, Foad Fadaghi.

 

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