Can new players save struggling Aussie mobile phone market?

The Australian mobile phone market continued its sixth straight quarter of decline, shipping 2.06 million devices compared to 2.2 million in 2015, representing a 8.2 per cent year-on-year decrease.

According to IDC findings, 1.96 million handsets shipped were smartphones whilst the remaining were feature phones during the third quarter of 2016.

Despite the recall of Samsung’s Galaxy Note 7, Q3 represents the best quarter of the year to date.

Research suggests that the 12.6 per cent quarter-on-quarter rise experienced in Q3 rides on the momentum gained from Apple’s new iPhone 7 launch.

“Interestingly, the market also saw a rise in shipments from vendors offering devices in the low/mid-priced bracket,” IDC Australia market analyst, Bilal Javed, said.

“Shipments were mainly driven through the open market as well as the pre-paid channel as established vendors such as Alcatel, Huawei, Motorola, OPPO aim to establish their footprint in Australia.”

Unsurprisingly, Apple continue to lead the smartphone market in Australia, with the tech giant growing market share from 40.4 per cent to 46.4 per cent in Q3, riding on the momentum of the new iPhone 7 launch in September.

However, despite the launch, Apple still experienced a 0.3 per cent decline YoY highlighting the struggles of the overall smartphone in Australia market as demand flattens.

“As the market matures, incremental innovation will not be enough to drive positive results as consumer believe the added features do not warrant an upgrade, especially in the high priced segment,” Javed added.

Meanwhile, Javed said the recall of the Galaxy Note 7 has dented Samsung’s push to go head-to-head with Apple in Australia significantly.

Samsung, who were gaining share since the launch of the highly successful S7/S7 Edge held 32. per cent of the market in Q2, which has now fallen back to 26 per cent in Q3.

“The timing of Note 7 recall has played nicely into Apple’s hands who were looking to sustain share through new product launch,” Javed observed.

In addition, Alcatel continue to consolidate devices by owning the low-price segment and grow to just over six per cent of the smartphone market in Q3.

According to Javed, low-priced devices available exclusively through operators allows the vendor to “branch out” and reach a wider audience.

Further down the list, ZTE continue to chip away, gaining 5.2 per cent share of the market as they increase channel partners with the aim of targeting audience who are looking for low-priced devices on a temporary basis, such as travellers.

Javed said Huawei also continues to invest in the Australian market with large volumes of low-priced (<AU$150) devices such as the Y3II and Y6 Elite being shipped through exclusive telco operators.

“Shipments were seen to spike in September as channel partners prepared for the busy Christmas period,” Javed said.

“The forces acting on the market such as Apple gain momentum with iPhone 7, low/mid-priced devices gain mass consumer acceptance as well as new players such as Google and HP entering the market place is expected to get the market out of this rut and towards growth for Q4 before flatting out through 2017.”