Australian Smartphone and Tablet Data

New Tablet Sales Down as Customers Await Upgrade Incentive

According to Telsyte, reported downturns in tablet sales are due, not to their decline in popularity, but instead to the fact that customers are happy to keep them for longer before upgrading.  Lengthier upgrade cycles for tablets versus smartphones mean that sales of new tablets are slowing as customers wait for a reason to upgrade.  Tablet customers should be pleased to know their devices can stand the test of time, with the most popular tablet, the iPad 2 now coming up to 3 years old.  Despite its age, it is expected to be able to run Apple’s latest mobile operating system iOS8, due to be released alongside the new iPhone 6 in September.

Following three solid years of growth, the first half of 2014 saw media tablets experience a 28% decline from the previous six months, to 1.8 million tablets sold in January – June 2014.  Despite this, the population penetration of media tablets continued to increase – to 46% or 10.8 million people at the end of June 2014.

Also in the Telsyte report was news that more Android tablets were sold than Apple tablets in the first half of the year for the first time in Australia.   Apple has retained 46% of tablet market share, with the rest of the market made up of Android (47%) and Windows-based devices (7%).   According to Telsyte managing director, Foad Fadaghi, this trend will be reversed in the second half of 2014, restoring Apple’s number one place by the end of the year.  In part, this may due to the ‘halo effect’ around Apple devices that will flow from the launch of a new iPhone in September.  It is expected that the halo around new Apple smartphones will extend out to other products, although the question remains whether customers would upgrade both their smartphone AND tablet in the same year. In addition, Fadaghi says “A tablet upgrade cycle might not commence until current devices become more readily obsolete, either in terms of computational capability, operating system, application interoperability, graphics or connectivity,” He also added that compatibility with wearable devices or sensors might be a driving factor for upgrades.

With as many as 1/3 of all Australians already interested in wearable technology we are set to see a lot of movement in this space in coming years. according to recent data from Telstra 30% of 18 – 24 year olds would be interested in smart watches and 15% in internet connected glasses.   The Interesting thing about wearables is that they are not necessarily replacements for smartphones or tablets.  Rather, they are often accessories, that connect, engage and report back to these devices.  For example the Rip Curl Search GPS is a surfing watch that allows surfers to record details about their surfing experience in real time on the watch face.   Back on solid ground the watch syncs over Bluetooth to a smartphone or PC so that surfers can relive and share their surfing session.  As demand for these kinds of niche wearables increase, their compatibity with other devices will become important factors in the buying decision process for smartphones and tablets.  Certainly tablet manufacturers will need to partner with, or invest in wearable technology to maintain relevance.

Another factor impacting on growth of tablet sales is the increase in smartphone screen sizes. According to predictions, screen sizes are likely to stabilize at around 5 or 5.5 inches over the next few years – significantly larger than current iPhones.  We have seen a steady increase in smartphone screen size over recent years, with all but Apple jumping on the oversize bandwagon.  In the APAC region, sales of larger screen devices make up 43% of all new phone shipments.  This is possibly driven by a large gaming market in areas like Hong Kong, Singapore and South Korea.  The European market has been slower to respond and Australians will probably follow the European path.  It is widely expected that Apple will launch one or two new larger screen devices in September –  possibly a 4.7-inch and a 5.5-inch iPhone.  Anything 5.5 inches and above appears to fall into the awkward category of Phablet, which is apparently the next ‘big’ thing in smart screens.  As a market that has been slow to move away from Apple, our uptake of phablets remains likely to depend on Apple and whether they launch the rumoured larger iPhone.

If Apple customers begin upgrading to larger screen devices, they may not see the need to upgrade their tablet, instead settling for a phablet or larger screen phone as a reasonable compromise.    Whatever happens with Tablets, it does seem likely we will see a lot more from the Phablet market.  A recent report by Business Insider predicts they will overtake smartphones by 2017, which certainly raises some questions about future demand for tablets.

Tags: , ,

Comments are closed.