Smartphone sales in Australia fell 6 per cent in H1 year-on-year to 3.7 million units and Android-based models pulled ahead of the iPhone to retake the lead with a 54 per cent market share.

The iPhone had a 41 per cent share, while Windows Phone-based devices had 5 per cent, according to a study by Telsyte. Its research showed Sony overtook HTC in the first half to become the third largest smartphone vendor in Australia, behind Apple and Samsung.

Almost three-quarters of Australians own a smartphone.

“The smartphone market is entering a stage of maturity with growth starting to be driven by demographic factors such as net migration and births,” Telsyte senior analyst Alvin Lee said.

Telsyte predicts 4.5 million smartphones will be sold in H2, with price and brand still the most important factors cited by consumers when it comes to choosing a smartphone. However, an increasing level of importance is being placed on ‘lifestyle’ factors such as durability and resistance to the elements.

Lack of killer apps
Despite the promotional hype surrounding smartwatches, only 205,000 units were sold in H1. Apple was the leader with a 64 per cent share in the first half, beating both Samsung and LG.

The study found that about 10 per cent of smartwatch users had stopped using their device altogether as the initial buzz around smartwatches has softened due to a lack of killer apps.

Telsyte said Apple’s H1 leadership was mainly due to the lack of new Android compatible smartwatches, but Apple’s sales were impacted by its premium pricing.

“The Apple watch remains a luxury gadget, with its sales price typically more than twice the average of rival Android-compatible smartwatches,” Telsyte MD Foad Fadaghi said.

Despite the slow sales of smartwatches, smart wristbands such as those sold by Fitbit and Garmin expanded 30 per cent in H1 from a year ago. Telsyte estimates that there are around two million smart wristband users in Australia.