The growth in smartphone prices is causing a drop in sales, according to research from Telsyte which showed sales decreased 3 per cent in 2018 compared to the year prior.

The research, Telsyte Australian Smartphone & Wearable Devices Market Study 2019, said 4.6 million smartphones were sold in the second half of 2018.

The average selling price of smartphones increased by 13 per cent between 2017 and 2018 causing a decrease in demand.

Telsyte forecasts some 9 million smartphones will be sold in 2019 (up just 1 per cent compared to 2018), as only a handful of Android vendors are expected release 5G smartphones in 2019.

In the Android smartphone market, the top three vendors were Samsung, Oppo and Huawei.

Samsung was the highest selling vendor for Android in 2018

Apple maintains the highest repeat purchase intention rate (greater than 85 per cent), with the next highest being Samsung at around 70 per cent.

5G handsets

The research noted the timing and availability of 5G handsets could cause the increase of handset sales for this year.

It said 24 per cent of consumers are also holding off buying a new smartphone until 5G becomes available and 33 per cent of Australians indicated 5G capability is important when choosing a smartphone.

If Apple releases a 5G iPhone at its usual timeframe in 2019, Telsyte forecasts this could lift total sales to 9.4 million, putting growth closer to 6 per cent.

Foad Fadaghi, managing director at Telsyte said, “There is a clear imperative for carriers to bring 5G handsets to market as soon as possible given the lengthening of the replacement cycle.”

Despite 5G mobile services not yet available currently in Australia, Telsyte believes consumers are considering ‘future proofing’ their next purchase, given they anticipate using the same handset for the next three years or longer.

Usage

There are 9.1 million Australians using an Apple iPhone, up from 8.6 million in the prior year and 11 million Android users, up from 10.3 million at the end of 2017.

9.1 million Aussies use an iPhone

Telsyte said smartphone dependency is at all-time high with 54 per cent of premium smartphone users, defined as handsets costing greater than $600, claim that their smartphone is their main digital device.

A fast-growing area of smartphone usage has been mobile payments, with nearly half of all mobile payment users claiming to use it ‘regularly’ (more than 75 per cent of the time) to pay for goods and services whenever possible, according to Telsyte’s research.

Following this trend, Telsyte research shows 13 per cent of Australians aged 16 to 34 have changed or joined a new banking provider due to the lack of mobile payments support, and 14 per cent of Apple Watch users have also done so.

Telsyte research also shows 46 per cent of e-commerce market revenue in 2018 was transacted through mobile devices (including smartphones and tablets). The ‘m-commerce’ market in Australia was worth $15.2b in 2018, up from $12.0 billion in 2017.

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