Apple uses iPhone 7 to grow smartphone share in Australia: IDC

Smartphone market share for Apple, Huawei, Alcatel, ZTE, and Oppo increased in Australia over the quarter, according to IDC, at the expense of beleaguered Samsung and the 'other' segment.
Written by Corinne Reichert, Contributor

IDC has reported that the Australian mobile phone market declined for the sixth consecutive quarter, shipping 2.06 million phones during the third quarter of 2016, 8.2 percent fewer than the 2.2 million shipped in the same period last year -- although higher than last quarter's 1.8 million shipments.

Apple's Australian market share grew from 40.41 percent last quarter to 46.42 percent this quarter, thanks to the launch of the iPhone 7; however, this represented a year-on-year gain of just 1.23 percent due to the saturation of the Australian market.

"As the market matures, incremental innovation will not be enough to drive positive results, as consumers believe the added features do not warrant an upgrade, especially in the high-priced segment," IDC Australia market analyst Bilal Javed said.

Samsung experienced a 6.9 percent drop over the quarter, from 32.89 percent market share last quarter to 26.01 percent this quarter, and down 3.42 percent year on year due to the global recall of the Samsung Galaxy Note 7.

Despite this, Samsung continues to enjoy the second-highest smartphone market share in Australia, followed by Alcatel, with 60.2 percent of the market, up 1.9 percent year on year and 0.66 percent quarter on quarter; ZTE, with 5.17 percent market share, up 2.29 percent year on year and 1.64 percent quarter on quarter; Huawei, with 4.92 percent market share, up 2.36 percent year on year and 1.64 percent quarter on quarter; and others including Oppo, with 11.46 percent market share, down 4.36 percent year on year and down 2.75 percent quarter on quarter.

(Image: IDC)

"Interestingly, the market also saw a rise in shipments from vendors offering devices in the low/mid-priced bracket," Javed added.

"Shipments were mainly driven through the open market as well as the prepaid channel as established vendors such as Alcatel, Huawei, Motorola, [and] Oppo aim to establish their footprint in Australia."

According to Oppo Australia CMO Michael Tran, the Chinese device manufacturer is targeting an increasingly higher percentage of consumers who do not wish to upgrade their high-end devices frequently, and are instead opting for lower-end models, for which Oppo is "perfectly situated".

"With the Australian market maturing, we're starting to see longer periods between upgrade cycles," Tran said in a statement.

"What we're seeing is consumers increasingly purchasing low- to mid-tier phones outright on prepaid or SIM-only plans. Those that do want to go down the contract route are also looking at alternative mobile devices, which have lower or zero handset repayment costs and offer greater value."

Last month, IDC reported Oppo topping the Chinese smartphone market, with 20.1 million shipments or 17.5 percent market share, growing by 106 percent year on year.

Oppo was followed in China by Vivo, with 19.2 million shipments or 16.7 percent market share; Huawei, with 18 million shipments or 15.7 percent market share; Xiaomi, with 10 million shipments or 8.7 percent market share; and Apple trailing in fifth place, with 8.2 million shipments or 7.1 percent market share.

"Oppo's success is not something that was achieved overnight," Xiaohan Tay, senior market analyst for Client Devices Research at IDC APAC, said at the time.

"Back in the earlier years, when vendors depended on operator subsidy to grow, Oppo was clear in its direction and focused on expanding its offline channels. It also had key strengths such as its VOOC fast-charging technology and in the elegant design of its phones. This, coupled with its aggressive marketing tactics, helped it succeed in the market."

IDC on Monday predicted that the used and refurbished smartphone market will grow at a 22.3 percent compound annual growth rate thanks to trade-in programs, forecasting that it will jump from 81.3 million devices in 2015 to 222.6 million in 2020.

In Australia, the no-contract sector now makes up 15.4 percent of the mobile market, up from 11.9 percent last year, while post-paid is down from 55.6 percent to 53.4 percent and prepaid from 32.6 percent to 31.2 percent, according to market research company Kantar.

In terms of carrier market share in Australia, Kantar reported that Telstra increased by 0.2 percent to hold 39.9 percent of the total mobile market.

Telstra was followed by Optus, which holds 22.3 percent of the market, up by 0.9 percent; Vodafone Hutchison Australia holds 14.9 percent, down 0.2 percent; other mobile virtual network operators account for 7.5 percent, down 1.1 percent; Virgin Mobile holds 5.2 percent, down 0.5 percent; Amaysim holds 4.9 percent, up 0.3 percent; Aldi Mobile holds 3 percent, up 0.8 percent; TPG holds 2.7 percent, down 0.6 percent; and Boost Mobile holds 0.7 percent of the market, up 0.1 percent.

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