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Foldable Smartphones Booming Despite 4% Fall In Overall Market

Both Apple and Samsung have taken a hit in the smartphone market with sales declining 4% overall in Q2 2021 due in part to stock shortages, according to Australian research Company Telsyte also gaining ground over Apple is Android based devices with demand for flip phones set to soar.

The research group claim both took a hit to their Australian sales largely due to supply chain shortages and a hangover from the pandemic.

Apple sales are down 2.4% and Samsung 1.7%, those that have gained share are Motorola and Nokia.

The Telsyte Australian Smartphone Wearable Devices Market Study 2022 found premium features such as 5G, high-refresh rate displays, and long software support have increasingly appeared in challenger brands’ mid-range offerings, putting pressure on the market leaders

They claim that despite falling sales Samsung’s investment in the foldable category has started to pay off with the foldable Samsung Galaxy Z Series making up 10% of their sales in the quarter.

Also gaining ground in the market in the past quarter was Motorola, Nokia and Google.

Overall, Telsyte estimates 4.49 million smartphones were sold in 2H 2021, down 1.5 per cent compared to a year ago.

Total Android smartphone sales increased by around 3 per cent in the same period.

The study found interest in foldable smartphones is growing, particularly among Australians planning to upgrade their smartphones in 2022. Over a quarter (26%) are interested in using a foldable smartphone, up 9 per cent from the previous year.

Despite 59 per cent of consumers preferring larger form factors (i.e. smartphone that folds out to a tablet), Telsyte believes lower priced flip models will sell substantially more units.

Both Motorola and Samsung are set to release new flip phones this year, it’s also tipped that Microsoft will also launch a foldable device.

Telsyte claims that consumer price expectations are starting to align.

Among those interested in the flip and larger tablet style foldables, there is a willingness to pay an average of 16 per cent and 29 per cent more (respectively) than a typical premium smartphone, which is close to current offerings.

Telsyte expects better software support to be a key driver.

This includes foldable-optimised mobile apps as well as improvements in the operating system, as promised by Android 12L – a feature update that optimises the user interface to take advantage of larger screens.

Telsyte believes there are untapped opportunities to shorten replacement cycles with smartphone subscriptions (sometimes called Hardware-as-a-Service).
With this model consumers pay a monthly fee for a handset that is swapped over when a new model is available.

The current average replacement cycle for smartphones is over 3 years in Australia, gradually edging up from 2.4 years in 2016.

Apple and Samsung are the top two smartphone manufacturers in Australia with a combined 17 million users. Samsung has recently started offering its own “Samsung Subscription” in partnership with Latitude Pay and bundles Samsung Care+.

Telsyte believes Apple could follow, as nearly a third of Australian iPhone users are considered loyal and locked in (i.e. measured by Telsyte as having 5 or more Apple products or services).

The research found 50 per cent of loyal Apple users claim to buy environmentally conscious or ‘green’ products and services when possible. Subscriptions and trade-in programs might resonate if manufacturers can re-use materials and improve sustainability.

“If the price is right, hardware subscriptions can shorten replacement cycles and pave the way for better smartphone recycling” Telsyte Managing Director Foad Fadaghi says.

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