Smartphones sales are down by 3.7 per cent year on year, while smartwatch sales are up by a staggering 80 per cent.
But what is driving these decisions?
The Telsyte Australian Smartphone & Wearable Devices Market Study looked into precisely this, finding 4.3M smartphones were sold in the first half of 2018 - down 3.7 per cent from the same time last year. Despite leading in market share (53 per cent Android vs 47 per cent Apple), Android sales during the measured period were down 7 per cent, compared to Apple which was up two per cent.
"Android smartphone sales had a sobering first half in 2018 after a strong upgrade year in 2017" Telsyte Senior analyst, Alvin Lee says. "The balance of 2018 could remain in favour of Apple with more iPhone users expected to be coming out of contract this year".
Apple remained the market leader in the first half, with Samsung, Oppo and Huawei making up the top four. Not only that, but Australians are picking up premium models as more high-end phones were purchased during the first half of 2018.
More than half (55 per cent) of iPhones purchased in the first half of 2018 was the higher end models (iPhone 8, 8 Plus and X), compared to 50 per cent a year ago (iPhone 7 & 7 Plus). Nearly one-third (32 per cent) of smartphones purchased outright cost more than $800 in the first half of 2018 compared to only 22 per cent in 2016.
Apple maintained the highest repeat purchase intention (90 per cent), followed by Samsung (85 per cent). No other smartphone brand has a repeat purchase intention rate of higher than 55 per cent in Australia.
Interestingly, the research shows around 1 in 3 smartphone owners are showing signs of holding off buying a new smartphone until 5G models become available. We will need to wait and see, but this could impact the market performance in the next 18 months before 5G smartphones become widely available.
"The arrival of 5G will create the next big upgrade event" Telsyte Managing Director, Foad Fadaghi says. "Carriers will be hoping 5G smartphones are available ahead of their network launches, if not soon thereafter".
The people 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 per cent, and those currently on contract (40 per cent). Nearly half (47 per cent) of iPhone users that intend to purchase a new iPhone in 2019 indicated they were likely to wait until a 5G iPhone was available.
In contrast to smartphone sales, smartwatch sales in Australia continue to grow strongly with around 680 thousand units sold during in the last year, up by more than 80 per cent. That means roughly 15 per cent of smartphone users are now using a smartwatch.
Apple continued to dominate the smartwatch market, with more than half of all units sold being Apple Watch. Others, including Fitbit, Samsung and Garmin are starting to see growth due to greater awareness, lower prices and customers upgrading from basic fitness bands.
Apple Watch has the highest repeat purchase intention at 80 per cent, while Fitbit sits at around 60 per cent.
Smart accessories like Apple AirPods have been a critical companion to the iPhone, with around 800,000 AirPod sold in Australia since 2016.
Other potential wearable categories, like smart glasses, are gaining interest from Australians. 30 per cent are aware of smart glasses, and one-in-five are showing signs of being interested in buying one, especially if the design is slim and light (like sunglasses) and it is priced similarly to a smartphone or tablet.