Luxury Portable Consumer Electronics in Australia

PROSPECTS

Luxury mobile phones unlikely to recover following collapse of Vertu

Luxury mobile phones continued to post rapid declines in volume and current value sales in 2019, and looks set to disappear completely from the Australian market early in the forecast period. Vertu, the only significant player in the category, collapsed into bankruptcy in 2017 after having failed to turn a profit for several years.

Luxury wearables set to benefit from convenience- and health-oriented innovation

The increasing affinity for luxury brands among millennials and Generation Z consumers – the most connected and tech-savvy demographics – bodes well for luxury wearables, which is projected to continue posting robust growth in volume and current value sales over the forecast period. Technological innovation will also drive the further expansion of the category.

Apple Watch Studio taps into personalisation trend with customised design options

Similar to other luxury goods categories, personalisation is becoming an increasingly important competitive strategy in luxury wearables. The clearest indication of this in 2019 was Apple’s launch of Apple Watch Studio, which coincided with the rollout of the Apple Watch Series 5.

COMPETITIVE LANDSCAPE

TAG Heuer targets golfers with special edition of its Connected Modular 45 model

As competition intensifies, manufacturers of luxury smartwatches are increasingly attempting to differentiate their brands with more innovative and niche-oriented technological functions and complementary apps. A prime illustration of this trend in 2019 was the launch of the TAG Heuer Connected Modular 45 Golf Edition.

High-end luxury smartwatch brands unlikely to embrace monthly plans

Towards the end of the review period, the three main mobile network operators in Australia – Optus, Vodafone and Telstra – began offering smartwatches on monthly contracts. For example, as of late 2019 Optus was offering Apple Watch Series 3, 4 and 5 products on monthly plans ranging from 12 to 36 months in duration.

Data privacy and security concerns present opportunities as well as challenges

Following a steady stream of data scandals and breaches in recent years, Australian consumers are increasingly concerned about data security and privacy issues. Such concerns are particularly acute among millennials and members of Generation Z, who live much of their lives online.

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