Today’s big news in technology is the much-anticipated announcement of the next-generation iPhone, the iPhone 6. With a bigger screen and more connectivity, including NFC, the iPhone 6 and iPhone 6 Plus are set to be very popular when available on September 19, however, Australians intending to buy an iPhone might delay their purchase due to cost.
High demand could mean strong sales
Telsyte forecasts around 1.5 million iPhone units (all models) could be sold by the end of the year in Australia, or around a 100,000 units per week on average over the peak holiday season, depending on stock availability and carrier contracts and offers.
The iPhone 6 should help grow the Apple user base. Telsyte surveys have shown a third of those intending to buy an iPhone in H2 2014, are currently not using an iPhone (i.e. using a regular phone, Android smartphone, etc).
Second hand and “hand me down” iPhones are expected to also grow the overall user base, an important trend for publishers and app developers alike.
Telsyte predicts phablets (smartphones with screens 5.5 inches or larger) will make up as much as 20 per cent of the overall Australian smartphone market by the end of 2016, with the iPhone 6 Plus an important catalyst.
Premium price will deter some buyers
In today’s world of sub-$300 smartphones, the biggest challenge might be Apple’s local pricing. Of the new iPhone 6 configurations only the iPhone 6 16GB comes in below $999. This might impact demand, particularly for outright purchases (i.e. not on contract or a payments plan). Apple might be creating a new “luxury” category – or maybe “ultra-premium” – given it is going against overall industry downward pricing trends.
High purchase prices also increase the importance of contracts and MRO payment plans, likely to be a key strategy of the carriers to lure customers, amongst other incentives.
The price shock might put off some of those who intended to purchase an iPhone 6. To put it into perspective, an iPhone 6 128 GB (A$1,129) will cost more than a MacBook Air 11” 128 GB (A$1,099).
Wearable Apple one to watch
Telsyte believes there were 380,000 smartwatch users (at the end June 2014) in Australia. Nearly 80 per cent of those smartwatch users were using Android smartphones; therefore the market could substantially grow with the arrival of the Apple Watch. Telsyte believes the Apple Watch will help it retain customers given it will work with the iPhone 5 or later.
Its release in 2015 might be strategic, so as to not affect iPhone 6 sales during the holiday season. It also gives developers time to create their smartwatch apps with WatchKit.
There is still some doubt of the usefulness or long term utility of smartwatches, while they simply remain accessories and not a replacement for smartphones all together.
As a result of the iPhone 6 and Apple Watch launch, Telsyte expects moves from competitors, including aggressive marketing of smartwatches and handsets by Samsung, Sony and others, given Apple’s Watch is not released until 2015.
Telsyte analysts are available for interviews and further commentary:
- Foad Fadaghi: +612 9235 5851
- Alvin Lee (carrier insights): +612 9235 5890
- Rodney Gedda (enterprise): +612 9235 5891
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