AI hype, 3G shutdown drive bumper smartphone sales

AI hype, 3G shutdown drive bumper smartphone sales


Telsyte managing director Foad Fadaghi.

However, despite the bumper sales period, consumers in general are still holding on to their devices for longer. The average smartphone replacement cycle for Australians is now at four years, jumping by six months in 2023, driven by ongoing cost-of living pressures, improved handset quality and longer software support for handsets.

Telsyte forecasts 8.7 million smartphones will be sold across the whole of 2024, an increase of 7 per cent, driven by demand for premium handsets with on-device AI features, better data security, and the desire from consumers to “future-proof” their smartphones.

“The premium segment is forecast to experience double-digit growth in 2024, a milestone not seen since 2021,” Fadaghi said.

“The iPhone’s repeat purchase rate in Australia has led the industry, maintaining 85 per cent or higher since 2020 and consistently above 80 per cent since 2016. Samsung holds the second-highest repeat purchase rate.”

The foldable smartphone market also remains a growth opportunity for vendors. Foldable device sales are expected to ramp up in the second half of the year, Fadaghi said, with existing and new foldable devices released by Samsung, Google, Oppo and Motorola. Apple is rumoured to be working on its first foldable phone, codenamed “iPhone Flip”.

The latest iPhone models released last month will be compatible with Apple’s generative AI features, dubbed “Apple Intelligence”, which will come to Australian users in December. The new generative AI tools will be able to write and summarise text, create cartoon-like images, edit photos and more, and will include an optional integration with OpenAI’s ChatGPT.

“Apple Intelligence will transform what users can do with our products, and what our products can do for our users,” Apple boss Tim Cook said in announcing the tools.

“Apple Intelligence will transform what users can do with our products, and what our products can do for our users,” Apple boss Tim Cook said in announcing the tools.

“Apple Intelligence will transform what users can do with our products, and what our products can do for our users,” Apple boss Tim Cook said in announcing the tools.Credit: Bloomberg

“Our unique approach combines generative AI with a user’s personal context to deliver truly helpful intelligence. And it can access that information in a completely private and secure way to help users do the things that matter most to them.”

Apple’s new iPhone range, released late last month, is also slightly cheaper than in years prior. The company trimmed the price of its iPhone 16 Pro model by $50 compared to last year’s model, and the standard iPhone 16 model is $100 cheaper.

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Fadaghi said device upgrades are also being spurred by the impending 3G network shutdown, which was originally slated for the end of August but was pushed back to October 24, over concerns that hundreds of thousands of mobile phones could potentially be cut off from triple-zero emergency services.

Telstra and Optus have been encouraging their customers to upgrade from older devices, and will shut down their 3G networks by the end of the month, while Vodafone’s parent company, TPG, shut down its 3G network last year.

Meanwhile, interest is growing in wearables, including smart rings, and demand for smart wrist wearables such as the Apple Watch and Fitbit remains strong.

Over a million smart wrist wearables were sold during the first half of 2024, up 2 per cent from a year ago. Apple, Samsung and Fitbit remained the top three vendors.

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