The rate of Australian smartphone sales decline has increased considerably over the third quarter of 2019, in comparison to global figures, with declines of 6.5 per cent and 0.4 per cent year-on year, respectively.
According to global research and advisory firm Gartner, the weakened demand was due to consumers being concerned about wanting value for money.
“For most smartphone users, desire has shifted away from owning the least expensive smartphone. Today’s smartphone user is opting for mid-tier smartphones over premium-tier ones because they offer better value for money,” said Anshul Gupta, senior research director at Gartner.
“In addition, while waiting for 5G network coverage to increase to more countries, smartphone users are delaying their purchase decisions until 2020.”
As a result, Samsung, Huawei, Xiaomi, Oppo and Vivo strengthened their entry-level and mid-tier offerings, which boosted Huawei, Samsung and Oppo's growth globally in the third quarter. Meanwhile, Apple saw double-digit decline over the same period.
In Australia, Apple was the top vendor in 2019’s third quarter for market share, taking up 40.6 per cent of the market with 873,000 units shipped.
Despite Apple’s Australian success, its global performance saw another quarter of decline with sales dropping 10.7 per cent year-on-year.
“Although Apple continued its sales promotions and discounts in various markets, this was not enough to stimulate demand globally,” said Gupta.
“In the Greater China market sales of iPhones continued to improve, however, it follows a double-digit decline recorded at the beginning of the year. The iPhone 11, 11 Pro and 11 Pro Max saw good initial adoption, which suggests that sales may be positive in the remaining quarter.”
Meanwhile the top global vendor continued to be Samsung with a market share of 20.4 per cent and 79.1 million units shipped.
“Samsung’s aggressive revamp of its portfolio, with a focus on mid-tier and entry-tier segments, strengthened its competitive position,” Gupta said.
In Australia, Samsung came in second with market share of 25.4 per cent for the quarter with 545,000 units shipped.
Huawei came second place globally with market share of 17 per cent and 65.8 million units shipped and was the only vendor to see double digit growth yet in Australia came third with market share of 13 per cent and 279,000 units shipped, translating to a decline in sales of 38.8 per cent.
Its global success was largely due to its performance in China, selling 40.5 million smartphones in the region. Internationally however, the vendor is still plagued by the negativity surrounding its proposed blacklisting by the US government, even after receiving a three month extension.
Oppo was Australia’s fourth place vendor with market share of 10.8 per cent and 231,000 units shipped, while other phone vendors had a combined market share of 10.3 per cent and shipped 221,000 units.
The fourth quarter is expected to bounce back through Black Friday and Cyber Monday deals on smartphones with expectations that Google and Samsung will offer “aggressive” discounts for both older and newer models, such as the Google Pixel 4 and Samsung Galaxy Note 10.
Further competition between manufacturers is predicted to focus on the intelligence of devices and their ability to deliver personalised content and services based on the context and preferences of users.
“To deliver relevant personalised experiences, manufacturers will need to improve the integration of artificial intelligence (AI) in smartphones and make security capabilities and privacy key aspects of their brands,” added Roberta Cozza, senior research director at Gartner.