The lack of 5G in the latest round of iPhones is expected to cause further declines in the smartphone market in 2019, according to a new report.
Figures by analyst firm Telsyte found 5G capability was important for more than a third of Australians when choosing to buy a new device.
According to Telsyte's Australian Smartphone & Wearable Devices Market Study 2019-2023, this figure rises to approximately 60 per cent for purchases planned before the end of 2020.
The study also found over four million smartphones were sold in the first half of 2019, a decline of 6 per cent when compared to this time period last year – double the rate of decline from the second half of 2018.
iPhone sales declined over the first half of 2019 by 13 per cent to 1.7 million, while Android sales held steady at 2.3 million.
The report attributed the decline to a prolonged iPhone replacement cycle and the expectation of more 5G enabled smartphones in the second half of 2019 and through to 2020.
Of those who purchased smartphones outright, the average time before replacement is at nearly three years. iPhone users were found to be holding onto their devices 25 per cent longer than Android users before replacing, increasing by 30 per cent to approximately 3.2 years and by 11 per cent to 2.6 years, respectively.
If Apple releases a 5G-enabled iPhone in 2020, the smartphone sales could reach 2017’s peak of nine million sales, in what Foad Fadaghi, managing director of Telsyte, called a “super cycle”.
“All the evidence is suggesting that we are set for a super cycle in 2020 as consumers replace ageing 4G handsets”, he said.
Despite the longer replacement time and sales decline, Apple was still the top vendor in Australia, followed by the Android vendors Samsung, OPPO and Huawei.
Apple, Samsung and OPPO also rated highly for repeat purchase rates, with the latter improving its repeat purchase rates ranking from sixth to third overall.
While the smartphone market has declined, the smart wearables and smartwatch market has improved, with 1.2 million smart wrist wearable devices selling in the first half of 2019, up 22 per cent from one million a year ago. Of this, 69 per cent were smartwatches with 830,000 sales.
Apple was the leader in the smartwatch market with its devices making up 48 per cent of total smartwatch sales over the six month period, followed by other main smartwatch vendors such as Samsung, Fitbit, Huawei and Garmin.
Similar to iPhones, Apple Watch users intend to upgrade their device as the smartwatch had a repeat purchase rate of over 90 per cent.