Mobile Phones in Australia

PROSPECTS

High penetration, longer replacement cycles and unit price increases influence fluctuating performance of smartphones

Retail volume sales of smartphones recorded a marginal recovery in 2019 compared to the decline of 2018. However, despite some more affluent consumers willing to upgrade to the latest models from known brands such as the iPhone X, iPhone 8 and iPhone 8 Plus and Samsung’s galaxy S9 and S9, this has led to continual increase in the unit price of smartphones, leaving the average Australian unwilling to pay.

Multifunctionality of smartphones replaces need for bulky older technology

Smartphones has high penetration in Australia with many local consumers appreciating their multifunctionality, which in addition to messaging and calls, allows them to take high-quality photos and videos for sharing on social media and streaming music in addition to in-car navigation due to adequate GPS capabilities. This has led to the ongoing declining demand for a number of consumer electronics in Australia including portable players, in-car navigation systems, digital cameras and digital camcorders.

Consumers await 5G before upgrading

The expectation that 5G networks are to be launched by Telstra, Optus and Vodafone in Australia by the end of 2020 is another influencing factor that could be restraining stronger sales and upgrades of smartphones. According to reports in the media, a substantial proportion of local consumers are prepared to purchase a new smartphone once mobile 5G is rolled out in the country, with others citing it as an important factor when choosing a device.

COMPETITIVE LANDSCAPE

Premium brands suffer second consecutive year of falling sales

Smartphones in Australia continued to be led by Apple Computer Australia Pty Ltd and Samsung Electronics Australia Pty Ltd in 2019. Both players are consistent in their launch of new products in an attempt to encourage consumers to upgrade to the latest technology that they have to offer with Apple launching the iPhone XR (at a more affordable price compared to some of its models) and iPhone XS towards the end of 2018.

Google’s Pixel struggles to maintain initial impressive growth

After entering Australian smartphones in 2017 with initial impressive sales growth, demand for Google’s Pixel model quickly waned with the brand now struggling to gain further retail volume share and recording low volume growth in 2019. The higher end brand was originally launched as a rival to the iPhone with a marginally lower price tag; at the end of 2018, the brand had launched Pixel 3 which was even more expensive that its Pixel 2, promoting its high-end camera and Google support for three years in updates.

Consumers attracted to more affordable brands in 2019

Despite falling sales for the leading brands, Chinese manufacturers such as ZTE fared better in smartphones in Australia in 2019, as they offer more competitive prices, appealing to price-sensitive consumers. Third-ranked Alcatel from Alcatel-Lucent Australia Pty Ltd was the strongest performer in 2019, gaining strong retail volume share and sales.

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