Less than 50% of smartphones bought in Australia were acquired via contract last year, according to analysts Telsyte.
Its latest study indicates purchasing phones outright is fast becoming more popular than plans from Telstra, Vodafone and Co. There was an increase of 2.6 million smartphone users in 2013, which now totals 15 million.
43 per cent of Australians (aged 16 +) acquired their smartphone via contract last year (-15% from 2012), while one third bought their phone outright. The remainder got their mobile as a gift, hand me down or from work.
So many savvy adults are buying new phones nowadays that old devices are being passed on to younger consumers and the elderly, says Alvin Lee, Telstyte analyst. The number of "second-hand" users nearly doubled in 2013.
Free handsets on plans, the emergence of competitive BYO and Sim-only plans, and cheaper outright prices have also contributed to this move away from telco contracts.
"The unbundling of handset and mobile service contracts has been growing in popularity as consumers seek new handsets more frequently than the typical 24 month contract," Telsyte MD Foad Fadaghi says.
Telco's are making less money on mobile consumer plans due to reductions in handset subsidies, margins being squeezed from powerful vendors like Apple as well as intense competition in the market.
Mobile plans may also be cheaper in the future to incentive consumers, Lee says, but says telcos will cater to demand, so more BYO and SIM-only plans could also emerge.
Android: Chrome To Call?
Android remained the leading platform, accounting for one in every 2 smartphones in Australia, followed by Apple (42%), and Microsoft, Blackberry, Symbian, picking up the remainder. Samsung, LG and HTC all sell popular devices on Google's Android OS.
Telsyte expects Android to remain the mobile leader until 2018 with no immediate threat to its dominance. However, Telsyte expects 'challenger platforms' Microsoft, Tizen, Sailfish and Firefox to double its share to 16 per cent by 2018.
But "it's possible that Google will experiment with Chrome-based smartphones as an alternative to Android at some point," Lee says.
Repeat smartphone purchases are increasing as users seek to hold on to the same familiar platform, either iOS or Android's green man.
73 per cent of iPhone owners intend to purchase another Apple, while Android repeat purchase are at 56 per cent.
And its all about the camera, with 'camera quality' of the smartphone rated as "important or critical" among consumers under 34.
Nearly half of this age group plan to purchase a new smartphone within the next two years.
Despite the dominance of iOS and Android, the battle for the mobile OS is entering a new phase as vendors to look to differentiate from Android, and take control back from the platform, says Telsyte, something which Samsung is looking to do by moving to Windows Phone 8 and developing Tizen OS.