Innovation drives sales: 2019 smartphone sales unlikely to top 2018

2018 was a bad year for smartphone sales in Australia – if you call selling 8.2 million phones to a population of 24 million a bad things.

Overall smartphone device shipments were down 9% year on year, which looks bad, until you realise 2017 was a boom for smartphones.

Why? The iPhone X – it was really something different, and it sold like hotcakes.

Analyst for IDC John Riga explains; “An overall lack of innovation and improvement in smartphones in recent years is extending replacement cycles”

“This is in line with the trend seen in other developed markets, where many consumers are holding off on upgrading to the latest device. At a local level, economic factors also drove this decline, with falling consumer sentiment indicating lower demand and minimal real wage growth limiting household disposable income.

For 2019, IDC predict a pretty stable market – with a tiny drop of 0.8%.

“With 5G devices and network infrastructure expected to be launched from 2019 in Australia, as well as the anticipated introduction of foldable phones, there may be some positive movement in the market” says Riga. “However, given the high price point likely to be attached to these devices, they will take time to gain a significant foothold in the market. For this reason, while they may generate some consumer enthusiasm, it is unlikely they will significantly impact the struggling mobile phone market”.

This mirrors the views of Telsyte, but is backed with actual sales data too. A 23.5% decline in smartphone shipments in the last quarter of the year in 2018 compared to 2017 with the biggest impact being on Apple.

As you can see from the sales data above from IDC – the real winners in that last part of 2018 were Oppo, Optus and TCL (Alcatel) with Alcatel retaining their dominant 3rd place market share, while Oppo and Optus has huge leaps forward in sales.

Only time will tell how the prices in 2019 and the devices themselves impact the overall sales in Australia.