Australian smartphone sales fell flat in 2016

Peter Terlato 28 February 2017

Smartphone user

Sales dip 2% year-on-year because of difficult retail climate.

Sales of smartphones in Australia dipped during the second half of 2016, due to increasing costs, device recalls and a challenging retail environment new research shows.

Emerging tech analyst firm Telsyte's Australian Smartphone & Wearable Devices Market Study 2017 shows 4.1 million smartphones were sold during the second half (H2) of 2016.

This figure represents a 2% year-on-year decline, when compared to the same period in 2015.

Telsyte attributed the fall in sales to a combination of detracting factors including the recall of the Samsung Note 7, the rising cost of premium handsets and a tough retail marketplace.

Following a rash of battery explosions, Samsung recalled all models of the Galaxy Note 7 sold worldwide.

The Apple iPhone was the most popular brand of smartphone sold during this period, with around 1.7 million units sold in H2 2016. Despite this achievement, Telsyte says it doesn't compare to the company's H2 2014 effort, which involved the launch of the iPhone 6 and its new, larger screen.

Android (52%) was the most popular operating system used on Aussie smartphones.

However, iPhone customers' repeat purchase intentions remain well ahead (80%) of other brands.

"A third of the iPhone installed base is on the iPhone 5S or earlier models, making them ripe for an upgrade," Telsyte senior analyst Alvin Lee said.

Telsyte's research shows that at the close of 2016, 75% of Australians were using a smartphone, with almost full penetration among the 18-55 age group.

Three quarters (75%) of smartphone users streamed music, video or both to their device during 2016, as mobile data caps increased and more than half of all mobile phones were connected via 4G.

Almost one third (30%) of all eCommerce purchases were made through smartphones and tablets.

Additionally, over two million Aussie smartphone users made food orders and delivery purchases in 2016, while 1.7 million used a ride-sharing service.

The research also revealed one quarter (25%) of smartphone users "feel addicted to their smartphone".

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