Hype Fails To Boost Aussie Smartwatch Sales

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Telsyte has found that the initial buzz around smartwatches has softened, with only 205,000 units sold in Australia in the 2015 first half.The Telsyte Australian Smartphone and Wearable Devices Market Study 2015-2019 has found “a lack of killer apps is holding back demand”, while some 10 per cent of smartwatch users have stopped using their device altogether.

While Apple was the smartwatch market leader in the first half with 64 per cent market share, beating out Samsung and LG, Telsyte notes Apple’s lead was mainly due to a lack of new Android-compatible smartwatches.

The Apple Watch’s sales were also impacted by its premium pricing, with Telsyte expecting Apple will release a lower-cost option to help increase sales in coming months.

“The Apple Watch remains a luxury gadget, with its sales price typically more than twice the average of rival Android-compatible smartwatches,” Telsyte managing director Foad Fadaghi commented.

“It is difficult to see mass market consumers paying as much as premium tablets or smartphones for wearable technology that does not have significant new or unique features.”

Smart wristband sales continue to grow, up 30 per cent in the first half year-on-year, with Telsyte estimating there are around two million smart wristband users in Australia. Rather than viewing smartwatches as having failed, Telsyte believes they are destined to make up a smaller proportion of the larger smart wearables market.

“In some ways the smartwatch market can be classified as the premium part of the smart wrist wearable market,” Fadaghi commented.

Meanwhile, smartphones are clearly the preferred portable device for communications and computing. Telsyte research shows 17.2 million Australians (72 per cent) now own a smartphone, with 3.7 million smartphones sold during the first half (6 per cent down from a year ago), with 450,000 new smartphone users added during the same period.

While pricing and brand are still the most important factors cited by consumers when it comes to choosing a smartphone, an increasing level of importance is being placed on “lifestyle” factors, such as durability and resistance to the elements.

Sales of Android smartphones pulled ahead of the iPhone in the first half, with a 54 per cent share, with the iPhone capturing 41 per cent, while Windows Phone devices (5 per cent) showed “relatively slow performance due to the lack of new handsets and Microsoft’s transition away from the Nokia brand”.

Sony overtook HTC in the first half to become the third largest smartphone vendor in Australia, behind Apple and Samsung.

Telsyte predicts 4.5 million smartphones will be sold in the 2015 second half.

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