Australian Mobile Phone Market Continues Decline

Estimated reading time: 2 minutes

The Australian mobile phone market continued its sixth straight quarter of decline as it shipped 2.06m mobile phones as compared to 2.2m same time last year representing a 8.2% YoY decline.

According to International Data Corporation’s (IDC) Quarterly Mobile Phone Tracker , 1.96m handsets shipped were smartphones whilst the remaining were feature phones in 2016Q3. Despite the recall of Samsung’s Galaxy Note 7, 2016Q3 was the best quarter of the year to date. The 12.6% QoQ rise experienced in 2016Q3 rides on the momentum gained from Apple’s new iPhone 7 launch. “Interestingly, the market also saw a rise in shipments from vendors offering devices in the low/mid-priced bracket. Shipments were mainly driven through the open market as well as the pre-paid channel as established vendors such as Alcatel, Huawei, Motorola, OPPO aim to establish their footprint in Australia” says Bilal Javed, Market Analyst at IDC Australia.

Apple continue to reign the smartphone market in Australia as they grew market share from 40.4% in 2016Q3 to 46.4% in 2016Q3 riding on the momentum of their new iPhone 7 launch in September. However, despite the launch, Apple still experienced a 0.3% decline YoY highlighting the struggles of the overall smartphone in Australia market as demand flattens. “As the market matures, incremental innovation will not be enough to drive positive results as consumer believe the added features do not warrant an upgrade, especially in the high priced segment” adds Bilal.

The recall for Galaxy Note 7 has dented Samsung’s push to go head to head with Apple in Australia significantly. Samsung, who were gaining share since the launch of the highly successful S7/S7 Edge held 32.9% of the market in 2016Q2, which has now fallen back to 26% in 2016Q3. The timing of Note 7 recall has played nicely into Apple’s hands who were looking to sustain share through new product launch.

Alcatel continue to consolidate devices by owning the low-price segment and grow to just over 6% of the smartphone market in 2016Q3. Low-priced devices available exclusively through operators allows them to branch out and reach a wider audience. ZTE continue to chip away, gaining 5.2% share of the market as they increase channel partners with the aim of targeting audience who are looking for low-priced devices on a temporary basis, such as travellers. Huawei continue to invest in the Australian market with large volumes of low-priced (<AU$150) devices such as the Y3II and Y6 Elite being shipped through exclusive telco operators.

Shipments were seen to spike in September as channel partners prepared for the busy Christmas period. The forces acting on the market such as Apple gain momentum with iPhone 7, low/mid-priced devices gain mass consumer acceptance as well as new players such as Google and HP entering the market place is expected to get the market out of this rut and towards growth for 2016Q4 before flatting out through 2017.