Australia’s 5G PR blitz may be hurting handset sales

5G
Image credit: ranjith ravindran / Shutterstock.com

ITEM: The 5G wars in Australia are having an impact on local smartphone sales – it’s slowing them down, as many consumers seem keen to wait for 5G devices before upgrading, according to analyst firm Telsyte.

Telsyte’s latest Australian smartphone and wearable devices market study reports that 4.3 million smartphones were sold in Australia in the first half of 2018 – that’s down 3.7% from the same time last year (4.4 million). It’s worse news for Android handsets, sales of which were down 7% in that time period, while Apple saw a 2% uptick, although Android still leads the market – just barely – at 53%.

That said, Apple leads in OEM handset sales, with Samsung, Oppo and Huawei ranking second, third and fourth. And it’s likely to hold that top spot as the company ranks the highest for repeat purchase intention (over 90%), followed by Samsung (over 85%).

But the interesting thing is why smartphone sales are sliding. Telsyte says its research found that roughly a third of smartphone owners have indicated they intend to hold off buying a new smartphone until 5G models become available. Telsyte managing director Foad Fadaghi says the arrival of 5G “will create the next big upgrade event”, which could impact market performance of handset sales in the next 18 months before 5G smartphones become widely available. From the press release:

Telsyte found that of those most willing to wait for 5G handsets includes users of premium model smartphones (e.g. Samsung Galaxy S8 & S9, iPhone X, iPhone 8) at around 50%, and those currently on contract (40%).

Nearly half (47%) of iPhone users that intend to purchase a new iPhone in 2019 indicated they were likely to wait until a 5G iPhone was available.

For context, Telstra and Optus have been engaging in a PR battle to promote 5G, its superfast data speeds and all the amazing apps it will enable, in an all-out effort to convince mobile users they will be the first operator to launch 5G in Australia, probably in 2019.

It’s possible the marketing blitzes may be working too well if some consumers are indeed postponing new phone purchases until 5G devices arrive. They may be in for a long wait, as the first 5G handsets won’t be revealed until early next year (likely at CES and MWC), which typically means they may not be available in the shops until at least the middle of 2019.

Meanwhile, Telsyte also reports that smartwatches are still selling well, with around 680 thousand units sold during the first half of 2018, up more than 80% from the same period last year. Telsyte reckons that around 15% of smartphone users are now using a smartwatch – with Apple once again dominating that space, accouting for over half of sales so far this year. Others OEMs, including Fitbit, Samsung and Garmin are starting to see growth due to greater awareness, lower prices and consumers upgrading from basic fitness bands.

[Production note: Telsyte points out that it measures sales of devices, not shipments or sales to retailers or carriers.]

1 Comment

  1. Out of interest, what are these premium users being led to expect from their 5G handsets?

What do you think?

This site uses Akismet to reduce spam. Learn how your comment data is processed.