Australian Smartphone and Tablet Data

What’s Really Going on With Australian Smartphone Market Share?

For a long time the Australian smartphone market has been defined by a battle between the iOS and Android operating systems.  At the heart of it, the battle is between Apple and Google.  Several times a year we are hit with headlines screaming that one has overtaken the other.  With Samsung’s strong position, the headlines sometimes scream that it’s Samsung set to overtake Apple this time.   So who is really leading the charge, what’s happening right now in Australia, and what should we expect in the next few years?  If you’re new to this market (or need a refresher), iOS is Apple’s mobile operating system and is the software that Apple use to power their iPod Touch, iPhone and iPad range.  Android is Google’s operating system for mobile phones and it’s available for any smartphone manufacturers to licence as an operating system for their hardware.  Brands like Samsung, Sony, Motorola and HTC now use the Android operating system as the software that powers their hardware.  Google also has its own device range called Nexus which runs on Android.

 

From an apps and content perspective, anything you create using Android is mostly compatible with all the different devices running the Android O/S.  This sets up a situation where a group of devices made by different manufacturers can form a viable alternative in market to the powerful incumbent of Apple.  Apple’s iPhone range of devices has earned strong brand loyalty in Australia and it took Australian audiences longer than others to warm to the Android offering. This also had a lot to do with the delay in launching some of the best Android devices in this market.  Eventually the breadth and variety of Android devices launched here resulted Android picking up market share and overtaking Apple.  There are now more Android devices in market in Australia than iOS devices and this has been fairly consistent for the last 3 years. Smartphone sales can change quite dramatically from month to month though, depending on new handset releases. For example if you had read any Australian articles about smartphone market share from earlier this year, they would have said that Apple (iOS) had overtaken Android as the most popular platform in Australia.  There were plenty of sensational stories in the media!  As you can see from the chart below, Apple dominated sales at this time due to the release of the iPhone 6.

Device Operating System Market Share of Sales May 2014 – April 2015

Android IOS chart
Before drawing any hasty conclusions, it’s important to understand the story behind the data and the chart above tells a far more realistic story.  Most global smartphone market share data is based on the Kantar World Panel which collates global smartphone sales.  The data they report is in 3 month intervals, so the figure for April 2015 is reflects sales for the 3 months leading up to and including April.  So for the 3 months leading up to April 2015:
  • 53% of Australian smartphone sales were Android
  • 36% of Australian smartphone sales were Apple
These numbers represent sales of new devices during that period, rather than the number of devices actually in market.   To get an idea of the devices that people are using across the wider market (not just the people who bought a new phone in the last 3 months) we need to take into account smartphone sales from one or two years ago as well.  With upgrade cycles of 2 – 3 years in Australia, a 2 year average will give a fair indication of the devices currently in the hands of most Australians.  As it turns out, the sales figures for the last 3 months are pretty close to the 1 and 2 year averages, so they’re probably not too far off the reality.
2 year average of Kantar Sales figures for Australia by Operating System
  • Android 57.3%
  • iOS 33.7%
1 year average of Kantar Sales figures for Australia by Operating System
  • Android  55.3%
  • iOS 35.9%
In a report late last year, Deloitte drew some conclusions based on the same data from Kantar, but at a fixed point (July 2014) and supplemented this with their own representative survey of around 2000 Australians from May 2014.   They concluded that 38% of Australians had an Apple device, 32% a Samsung with the remainder divided between other brands.  This finding illustrates the dominance of the Samsung brand in Australia.  Far and away the most popular manufacturer using Android in Australia, Samsung has actually become a viable competitor to Apple in its own right.    The Deloitte report also generated a chart that illustrates device ownership by age group which shows that while Apple dominates the younger market, Samsung appeals across the board and other manufacturers feature in the older demographic.

 

Australian Device Ownership by Age Group
Screen Shot 2015-06-24 at 6.14.14 pm
Source: Page 15 of the Deloitte Mobile Consumer Survey 2014
 While monthly figures fluctuate, and the market continues to be impacted by new handset releases, Apple’s market share in Australia is stable over the long term, with slow, consistent growth keeping pace with market penetration

 

Smartphone Sales – iOS Market Share Annual Average 
2012 – 30.6%
2013 – 31.4%
2014 – 33.9%

 

In a nutshell, Australians are pretty brand loyal when it comes to smartphones; iPhone users will upgrade to another iPhone.  Android users are less likely to switch to an iPhone, though they are more likely to switch brands within the Android ecosystem.  Some say we’ll see a run on Windows devices in the next few years and this is not out of the question.  They’ve maintained 8 – 10% for a few years now and are the only other O/S hanging in there with stable presence.

 

 Apple Watch brandedThe next big thing to potentially impact on this market will be the Apple Watch.  According to recent research from Roy Morgan around 2.7% of Australians intended to buy a smartwatch in the 4 months before the Apple Watch was launched in Australia in April this year.  This is very similar to the 3.6% of Australians who intended to buy an iPhone when it was launched back in 2008.  A year later, that’s exactly what happened, and 7 years on we have over 80% smartphone penetration.

According to all reports, the smartwatch market is heading in much the same direction, with Apple once again leading the charge.   This represents a growth opportunity for Apple as people will need an Apple device to make the most of their watch functionality.

Apple’s lead in the smartwatch sector could give iOS devices a short term boost in sales that may lead to longer term brand loyalty.  Apple has sat comfortably on around 1/3 market share in Australia for the last few years, but the boost from the Apple Watch could lift that figure and allow them to sustain it through at least one upgrade cycle.  The hassle of having to switch not just your phone but also your watch could lock customers in for the long term.  Device size is also a factor here.   The trend is towards larger screens and ‘phablet’ style devices, paired with an integrated watch.   Over time, other brands will launch competitive watch offerings and those with the strongest integrated device offering will take market share.   Before long, most successful smartphone manufacturers will have a range of compatible watch offerings with a variety of feature sets.   In terms of the direction of the Australian smartphone market, it’s well worth keeping an eye on smartwatch offerings from the various manufacturers.   At least for the next few years, each brand’s smartwatch offering will be a key factor in who leads in the Australian Smartphone market.

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