Australia’s premium and budget smartphone sectors saw double digit sales growth in the first six months of 2024, according to new research.
Overall, there were 3.98 million units sold, up eight per cent, says Telsyte’s Australian Smartphone & Wearable Devices Market Study 2024-2028.
“This market polarisation stems from heightened demand for cutting-edge AI capabilities in flagship models and the impending Telstra and Optus 3G network shutdown, forcing many users to upgrade,” Telstye says.
“The average smartphone replacement cycle or time people are hanging onto their phones extended by six months in 2023, reaching nearly four years.”
The research said this reflects “persistent cost-of-living pressures, improved device longevity and extended software support”, and that people in the sub-$1,000 market were more likely to hold onto their device for longer.
While both major platforms saw increased sales, Telstye says Android smartphones outpaced iPhones with double-digit growth (12 per cent vs. four per cent).
“This surge is attributed to the proliferation of handsets with integrated Gen AI and Android’s diverse price points, which better catered to consumers seeking affordable 3G replacements.”
The top two vendors remained Apple and Samsung, and third place bounced between Oppo and Motorola.
Gen AI phones, including the Apple iPhone 15 Pro series, accounted for about a third of total sales in the measured six-month period, Telstye says.
“More than seven million Australians have already embraced Gen AI applications like OpenAI’s ChatGPT, Meta AI, Microsoft Copilot, and Google’s Gemini.”
However the report states that two thirds of Gen AI app users “expressed concerns about personal data handling by third-party apps … only 35 per cent of smartphone users trust their device manufacturer and the services they provide, with Apple users showing the most trust (39 per cent)”.
Computers remain the primary device for Gen AI access, Telsyte says, with three-quarters of Gen AI users accessing apps via computers compared to less than half on smartphones. However the company “predicts smartphones could close the gap within two years with the increasing availability of Gen AI smartphone features”.
Other findings include:
- One in six smartphone users say their next phone “must have” advanced AI features;
- One in five users smartphone users would consider upgrading for advanced on-device AI features, rising to 31 per cent among those looking to purchase a smartphone by 2025;
- Half of smartphone users are interested in AI assisted photo and video editing, live translation, text generation and other AI features on their devices. However, only a third (36 per cent) of interested users are willing to pay (e.g. just under $10 monthly) for such features;
- Telsyte forecasts 8.7 million smartphones will be sold for the full year 2024, an increase of seven per cent.
- Forty per cent of smartphones sold in 2024 are expected to be Gen AI smartphones, with increasing availability from manufacturers such as Samsung, Apple, Google, Motorola, Oppo and Asus.
- The release of Apple Intelligence “could spark a major iPhone upgrade cycle in the next 12 to 18 months, rivalling the growing Android premium device trends. This hinges on Apple’s ability to showcase private, on-device context-aware AI that can seamlessly integrate into apps and routines”.
- Foldable devices accounted for eight per cent of total Android smartphone sales in 2023. Telsyte projects this figure could reach 10 per cent in 2024;
- Over one million smart wrist wearables were sold during the first half of 2024, up two per cent year-on-year.
- A quarter of Australians are aware of smart rings. this discreet wearable technology, available from manufacturers like Oura, Samsung, Ultrahuman and RingConn.
- Among those aware, 29 per cent “expressed interest in wearing one for fitness, health monitoring, and mobile payments, with a willingness to invest close to $500”.
- Smart hearables sales reached over 1.3 million units during the same period, up 6 per cent from a year ago.
Telsyte says it used an online survey conducted in August 2024 with a representative sample of 1,085 respondents, 16 years and older; an online survey conducted in May 2024 with a representative sample of 1,050 respondents, 16 years and older; interviews conducted with executives from service providers, network operators, manufacturers, retailers, financial analysts and channel partners; financial reports released by service providers, manufacturers and retailers, monitoring of local and global market and vendor trends; and analyst reviews of leading smartphone and wearable devices.
