IDC forecast Australia’s smartphone market to remain under pressure this year, as consumers spend cautiously and economic factors weigh on disposable incomes.

It predicted full-year shipments will decline by a low single-digit percentage after noting a 7.6 per cent year-on-year drop to 1.6 million units in Q1.

“The combined pressure of macroeconomic uncertainty and the higher cost of living is making consumers rethink how often they should refresh their phones,” Yash Gupta, lead analyst at IDC Australia, said.

“Consumers are willing to hold on to their phones longer, even if they must spend more on a premium handset.”

IDC noted the market was subdued, with inflation at about 7 per cent and higher interest rates restricting consumer demand.

This led to high inventory levels across channels, with vendors adopting a cautious approach by limiting their inventory, IDC stated.

Shipments in most segments dropped, but gains in the premium market ($1,000+) drove a 15 per cent increase in the ASP to $835.

Apple remained top with flat shipments of 728,000 units.

Samsung followed on shipments of 578,000 down 13.2 per cent.

Oppo shipments fell 11.6 per cent to 89,000; HMD Global’s rose 4.1 per cent to 52,000; and Google was up 44.9 per cent to 48,000.