Australia’s smartphone sales bounce back

October 8, 2024

3G retirement and “Gen AI” devices driving upgrades

SYDNEY, AUSTRALIA – Australia's smartphone market rebounded sharply in the first half of 2024, with sales surging 8 per cent year-over-year to 3.98 million units, driven by Android devices, according to Telsyte's latest research.

The Telsyte Australian Smartphone & Wearable Devices Market Study 2024-2028 found both the premium (>$1,000) and budget (<$300) segments saw double-digit growth during the six months. This market polarisation stems from heightened demand for cutting-edge AI capabilities in flagship models and the impending Telstra and Optus 3G network shutdown, forcing many users to upgrade.

Despite the sales uptick, the average smartphone replacement cycle or time people are hanging onto their phones extended by six months in 2023, reaching nearly four years. This shift reflects persistent cost-of-living pressures, improved device longevity, and extended software support. The trend is most pronounced in the sub-$1,000 market, where replacement cycles now exceed those of premium devices by at least a year. Premium smartphone replacement cycles have remained steady in the past year.

While both major platforms saw increased sales, Android smartphones outpaced iPhones with double-digit growth (12% vs. 4%). This surge is attributed to the proliferation of handsets with integrated Gen AI* and Android's diverse price points, which better catered to consumers seeking affordable 3G replacements.

The top two vendors remained Apple and Samsung. On any given month either Oppo or Motorola were in third place with Motorola edging closer to Oppo annually.

Gen AI phones, including the Apple iPhone 15 Pro series, accounted for about a third of total sales in the measured six-month period. The iPhone 15 Pro series led Apple's sales, buoyed by anticipated compatibility with the upcoming Apple Intelligence release.

On-device AI gaining momentum in the smartphone landscape

According to Telsyte's latest research, more than seven million Australians have already embraced Gen AI applications like OpenAI's ChatGPT, Meta AI, Microsoft Copilot, and Google's Gemini. However, two-thirds of Gen AI app users expressed concerns about personal data handling by third-party apps.

The study found that only 35 per cent of smartphone users trust their device manufacturer and the services they provide, with Apple users showing the most trust (39%).

Computers remain the primary device for Gen AI access, with three-quarters of Gen AI users accessing apps via computers compared to less than half on smartphones. However, Telsyte predicts smartphones could close the gap within two years with the increasing availability of Gen AI smartphone features.

The study found a nascent but growing demand for on-device AI features, with one-sixth of users stating their next phone “must have” advanced AI features. Overall, 1 in 5 smartphone users would consider upgrading for advanced on-device AI features, rising to 31 per cent among those looking to purchase a smartphone by 2025.

Demand for new features remains high, with half of smartphone users interested in AI assisted photo and video editing, live translation, text generation and other AI features on their devices. However, only a third (36%) of interested users are willing to pay (e.g. just under $10 monthly) for such features.

While cost-of-living pressures remain, Telsyte forecasts 8.7 million smartphones will be sold for the full year 2024, an increase of 7 per cent driven by demand for premium handsets with on-device AI features; better data security; and the desire to "future-proof" smartphone purchase, given an intention to use phone for up to 5 years.

Two in five smartphones sold in 2024 are expected to be Gen AI smartphones, with increasing availability from manufacturers such as Samsung, Apple, Google, Motorola, Oppo and Asus.

The nearing release of Apple Intelligence could spark a major iPhone upgrade cycle in the next 12 to 18 months, rivalling the growing Android premium device trends. This hinges on Apple’s ability to showcase private, on-device context-aware AI that can seamlessly integrate into apps and routines.

Foldable smartphones continue to grow in adoption, with innovations like Huawei's recently unveiled trifold design pushing the boundaries of form factor evolution.

Foldable devices accounted for 8 per cent of total Android smartphone sales in 2023. Telsyte projects this figure could reach 10 per cent in 2024, driven by new and existing offerings from Samsung, Google, Motorola, and Oppo.

“On device generative AI upgrades and new form factors are breathing life into an otherwise very mature sector” says Telsyte Managing Director, Foad Fadaghi, says.

“However, manufacturers could do more about educating their customers on both the utility and safety of their Gen AI platforms,” says Fadaghi.

Health and fitness monitoring drive smart wearables’ success

Australians' commitment to health and fitness continues to fuel the smart wearables market, with nearly two-thirds of users expressing a desire to stay fit and healthy.

Over a million smart wrist wearables were sold during the first half of 2024, up 2 per cent year-on-year, with smartwatches accounting for three-quarters of sales. Apple, Samsung and Fitbit lead the wrist wearable vendor rankings.

The study also revealed Australians’ openness to new wearable form factors, including “smart rings”. A quarter of Australians are already aware of this discreet wearable technology, available from manufacturers like Oura, Samsung, Ultrahuman and RingConn.

Among those aware, 29 per cent expressed interest in wearing one for fitness, health monitoring, and mobile payments, with a willingness to invest close to $500.

“Smart rings could offer a more comfortable option for nighttime health monitoring compared to wrist-worn devices,” says Telsyte Senior Analyst, Alvin Lee.

Smart hearables sales reached over 1.3 million units during the same period, up 6 per cent from a year ago. This category remains attractive to Australians seeking lower cost tech upgrades that enhance cross-device user experiences.

For further information on the study or media enquiries contact:

Foad Fadaghi
Managing Director
Tel: 1800 313 142
Email: ffadaghi@telsyte.com.au

Alvin Lee
Senior Analyst
Tel: 1800 313 142
Email: alee@telsyte.com.au

The Telsyte Australian Smartphone & Wearable Devices Market Study 2024-2028 is a comprehensive study that provides subscribers with:

Smartphone market sizing estimates, platform and vendor market shares and forecasts
Smart wrist-based wearables market sizing estimates, platform and vendor market shares and forecasts
Smart hearables market sizing estimates, platform and vendor market shares and forecasts
End user trends across devices, application usage, platforms and operators
Purchase intentions and acquisition channels
Strategic analysis of recent market trends and developments

In preparing this study, Telsyte used:

An online survey conducted in August 2024 with a representative sample of 1,085 respondents, 16 years and older.
An online survey conducted in May 2024 with a representative sample of 1,050 respondents, 16 years and older.
Interviews conducted with executives from service providers, network operators, manufacturers, retailers, financial analysts and channel partners.
Financial reports released by service providers, manufacturers and retailers.
On-going monitoring of local and global market and vendor trends.
Analyst reviews of leading smartphone and wearable devices.

Telsyte measures smart wearables as:

Smart wrist wearables worn on a user’s wrist typically paired and controlled via a smartphone. Examples includes products from Apple, Fitbit, Fossil, Garmin, Oppo, Samsung, Polar, Ryze, SPACETALK, Withings and others.
Smart hearables: smart earbuds and headphones that support digital assistant and typically paired with a smartphone. Examples include Apple Airpods, Samsung Galaxy Buds, Google Pixel Buds, Amazon Echo Buds, JBL Reflect Flow Pro+, Jabra Elite, Bose QuietComfort® 45, and Sony LinkBuds.

Telsyte covers smartphones from Apple, ASUS, Black Shark, CAT®, Google, HMD, Motorola, Nokia, Nothing, Opel, OPPO, Samsung, TCL, Xiaomi, ZTE and others.

Editor’s note:

*Telsyte defines GenAI smartphones as smartphones with advanced hardware such as a system-on-a-chip (SoC) and neural processing unit (NPU), designed and optimised to efficiently run on-device generative AI models that facilitate a better understanding of personal context. These smartphones enable local execution of AI-driven features, allowing for real-time generation of content and designs without fully relying on cloud processing. Examples include Apple Intelligence, Samsung’s Galaxy AI and Google’s Gemini Nano.

Telsyte measures sales of devices (“sell out”), not shipments or sales to retailers or carriers (sometimes called “sell-in”). Telsyte believes this is a more accurate measure of performance of products in a marketplace. Telsyte does not rely on disclosure from vendors or general assumptions made for large multinational companies that do not release local market data. Telsyte uses a comprehensive methodology that includes surveys of consumers, discussions with vendors, carriers and their partners, retailers, and financial analysts. In addition, public financial results from manufacturers and carriers are used. Telsyte tests a wide range of products in real life usage scenarios and conducts satisfaction and repeat purchase surveys with large and representative samples of Australian smart device users. Telsyte is a pioneer in measuring and reporting smartphone sales in Australia and has been providing insights on mobile technologies since 2006.

About Telsyte

Telsyte is Australia’s leading emerging technology analyst firm. Telsyte analysts deliver market research, insights and advisory into enterprise and consumer technologies. Telsyte is an independent business unit of DXC Technology. For more information visit www.telsyte.com.au

The material in this article is copyright protected and not intended to be altered, copied, distributed or used for any commercial or non-commercial purpose, except for news reporting, comment, criticism, teaching and scholarship.

Ad-supported streaming surges as Australians seek budget-friendly entertainment

September 2, 2024

Despite cost-of-living pressures, Subscription Video on Demand (SVOD) services increased by 4 per cent year-on-year to reach 25.3 million in June 2024

SYDNEY, AUSTRALIA – The Australian entertainment subscription market, which includes video, music and game services, grew by 5 per cent to 52.3 million services in the 12 months to June 2024, despite cost-of-living pressures and services’ increasing focus on profitability, according to new research by emerging technology analyst firm Telsyte.

The Telsyte Australian Subscription Entertainment Study 2024 found despite a stronger impact of cost-of-living pressures entertainment subscriptions remain essential to Australians, with around half of SVOD and streaming music users considering their services vital in meeting their entertainment needs. Amongst video game subscribers, this figure rises to 58 per cent for hardcore gamers who play for more than 3 hours daily.

The study indicates the market is maturing, particularly in SVOD services, where most (over 70%) subscribers now have more than one service. Growth rates are in single digits: SVOD (4%), streaming music (9%), and games-related subscriptions (6%). Streaming music's higher growth was boosted by the launch of TikTok Music during this period.

Ad-supported plans driving SVOD growth

SVOD continues to grow in a mature market and the total number of Subscription Video on Demand (SVOD) services grew by 4 per cent year-on-year, reaching 25.3 million in June 2024.

Subscriber growth is attributed to a population increase, the introduction of more affordable ad-supported plans, and strong consumer interest in diverse content across multiple services. Revenue growth was driven by subscription cost increases and increased service adoption.

Netflix remains the clear leader with 6.2 million subscriptions at the end of June 24, followed by Amazon Prime Video (4.8 million); Disney+ (3.1 million); Stan (2.6 million); Paramount+ (1.8 million); Kayo Sports (1.6 million); and Binge (1.6 million).

The long tail of smaller services (below 1 million subscriptions) collectively increased by 1 per cent, driven by consumer interest in diversified content at affordable price points, sometimes under $10 per month.

Among all services above 100,000 subscriptions, BritBox saw the fastest growth in FY2024. Anime-focused Crunchyroll and reality TV-focused Hayu also showed strong performance.

Excluding dedicated sports services that serve ads during live sports broadcasts, Telsyte’s research found there are some 2.5 million SVOD subscriptions subsidised by advertisements (June 2024), up from around million a year ago. Ad-supported subscriptions now account for 11 per cent of the total SVOD services.

Offered by Netflix, Binge and Paramount+, ad-supported plans are the most affordable base tier and come at a time when consumers are increasingly tightening their wallets.

This growth is set to continue as the study found consumers are increasingly receptive towards having advertisements on their SVOD services if it can help subsidise the subscription cost. Close to 1 in 2 (45%) of SVOD users are interested in such a plan, a sharp 9 per cent increase from a year ago.

Telsyte estimates the introduction of more ad-supported plans could potentially lift the average number of subscriptions per household closer to 3.7 (currently 3.4) by 2028.

While demand for video subscription entertainment remained strong, paid SVOD services rank 8th among areas where consumers had reduced spending in the last 12 months, compared to 10th a year ago, according to Telsyte’s consumer spending insights.

More competition here as cost-of-living pressures hit SVOD

SVOD services remain an important part of Australians’ video entertainment mix with over half (53%) of SVOD subscribers Telsyte surveyed indicating they continue to discover interesting new content and 45 per cent are comfortable paying for multiple services.

However, the study among those willing to pay for streaming video services, the average monthly budget has marginally declined by 2 per cent to just under $36, adding to last year's 7 per cent increase. The hardest hit consumer segments that saw their SVOD budgets reduced the most are young families and individuals with a medium income.

The study found the SVOD market revenue (excluding advertisements) reached an estimated $3.5Bn for FY2024, a 15 per cent year-on-year increase driven by cost rises and increased service adoption.

Depending on the plan, the retail costs of top SVOD services have increased between 10 and 67 per cent since June 2020, impacting the affordability of accessing services.

The increasing costs highlight the potential interest in bundling multiple services to save costs, with nearly half of SVOD users claiming they will consider subscribing to new services if they come with a bundled discount with services they are already paying for.

“While Ad-subsidised SVOD subscriptions have been driving market growth, SVOD providers are entering the end of the peak growth cycle”, says Telsyte Managing Director Foad Fadaghi.

Australians are also allocating more time for free and ad-supported streaming services due to the rising cost of living, with 40 per cent (up 8% y-on-y) claiming they are relying more on free services due to budget constraints.

According to Telsyte’s research, the average total weekly video entertainment consumption increased by 4 per cent year-on-year to 47 hours, driven by free sources such as BVOD, YouTube and videos on social media.

Notably, social media video platforms such as YouTube and TikTok continue to be popular among Australians. Telsyte estimates over a million are subscribed to YouTube Premium, the paid version of YouTube, highlighting the demand for niche and user-generated content.

Broadcasting Video On Demand services (BVOD, incl. 7Plus, 9Now, 10Play, ABC iView and SBS On Demand) remained popular and most BVOD platforms had more than 11 million viewers during FY2024. The research also highlighted the increased usage of 9Now during the 2024 Paris Olympics.

Additionally, nearly five million Australians claim they have used Free and Ad-supported streaming TV (FAST) services or services that offer FAST channels in the last 12 months.

The FAST market has quickly expanded over the last 24 months, with services such as Samsung TV Plus, LG Channels and Plex. Dedicated fast channels can also now be found on all of the BVOD services and Fetch’s platform.

SVOD’s next level: Immersive technologies for video entertainment

Traditional video entertainment is on the cusp of a revolutionary transformation, driven by an increasing adoption of immersive technologies that will redefine the entertainment experience.

Telsyte's projections indicate a potential surge in xR headset usage among Australians driven by better technologies that target the entertainment audience; increasing availability of content and applications; as well as popular brands such as Apple Vision Pro entering the market.

Telsyte estimates the number of xR headsets adopted by Australians is expected to more than double from around 1.5 million in 2023 to almost 3 million by 2028.

As spatial computing gains popularity, the potential for dedicated immersive spatial entertainment subscriptions and enhanced viewing experiences within existing platforms is high.

Telsyte’s research found consumer interest in xR applications is primarily driven by video games and video-related entertainment, including sports, movies, and 3D-format entertainment.

Multi-view capabilities for simultaneous content consumption (e.g. sports games); the resurgence of 3D movies; and immersive live experiences such as concerts and sporting events are just a few examples of the exciting possibilities on the horizon.

"Immersive technologies can be a catalyst for future growth in the SVOD market," says Telsyte Senior Analyst Alvin Lee.

Telsyte estimates the total number of SVOD subscriptions could reach over 30 million by June 2028, driven by robust content pipeline; potential new market entrants such as HBO Max; increasing availability of ad-supported plans across numerous services; and more immersive video experiences.

Demand for local content and production remain strong

The study highlighted significant interest in Australian content on SVOD platforms in the past year, and two in three (64%) Australians claim they have watched Australian-related content on SVOD during that time.

Drama, documentaries and comedy content were among the most popular categories, with more than half (56%) say they want to see more on these platforms.

Half of subscribers still believe it is important to have content that has Australian stories, voices, culture and values on SVOD services. Additionally, 37 per cent of Australians say they are more likely to tune in if the video content is about Australia or is an Australian production.

As generative AI continues to gain popularity in Australia, the study found consumers have growing concerns over the use of the technology to produce video content.

More than half (56%) do not believe generative AI can replace human screenwriters in creating captivating, distinct storylines of interest (up 5% y-on-y). Additionally, Australians show strong support for the local production industry, with 57 per cent saying the use of generative AI-produced material should be regulated in the sector.

There is also strong support for proposed changes to anti-siphoning laws, as 60 per cent of SVOD users say access to free sports via streaming should be guaranteed for Australians.

New services and population growth lifting streaming music subscriptions

Streaming music reached 18 million subscriptions at the end of June 2024, an increase of 9 per cent from previous year, driven by population growth and the launch of TikTok Music.

The top 3 streaming music service providers in Australia remain Spotify, Google (incl. YouTube Music and those using YouTube Premium for music listening) and Apple Music. Listenership on Amazon Music is also growing steadily as part of Amazon Prime subscriptions.

In addition to music, the study found that interest in audiobooks continues to grow steadily with over 1.5 million users as of June 2024. Audible and Spotify are the top two platforms Australians used to stream or download audiobooks.

Games related subscriptions maintain modest growth

Australians held over 9 million games-related subscriptions at the end of June 2024, a 6 per cent increase from a year ago.

Microsoft’s Xbox Game Pass remains the leader across all types of games-related subscriptions that Telsyte measures as consumers continue to gravitate towards the all-you-can-play subscription model.

Interest in cloud gaming remains high with over a million adopting services such as Microsoft’s xCloud and GeForce Now. GeForce Now saw the strongest subscription growth across games-related subscriptions during this period.

For further information on the study or media enquiries contact:

Foad Fadaghi
Managing Director
Tel: 1800 313 142
Email: ffadaghi@telsyte.com.au

Alvin Lee
Senior Analyst
Tel: 1800 313 142
Email: alee@telsyte.com.au

The Telsyte Australian Subscription Entertainment Study 2024 is a comprehensive study which provides subscribers with:

Market sizing and forecasts of the Australian entertainment subscriptions market, including video, music and games
Insights into consumer attitudes and technology adoption trends
Uptake, intention and detailed analysis of

Video services including: SVOD, pay TV and BVOD services
Streaming music services
Games-related subscription services

Service and content consumption preferences
Insights into the future of entertainment subscription services in Australia.

In preparing this study, Telsyte used:

An online survey conducted in August 2024 with a representative sample of 1,085 respondents, 16 years and older.
An online survey conducted in May 2024 with a representative sample of 1,050 respondents, 16 years and older.
Interviews conducted with executives from SVOD, Pay TV and video game service providers, content providers, funding agencies and hardware manufacturers.
Financial reports released by service providers and media companies.
On-going monitoring of local and global market trends.

Editor’s note:

Nine's reporting methodology for Stan changed in FY24, now focusing solely on paid subscriptions. Free trials were also discontinued in June 2024. The reported 2.6 million subscriptions includes Telsyte's estimates of remaining trial subscriptions at the end of June 2024. Nine's new reporting shows Stan's paid subscribers increased from 2.2 to 2.3 million during this period. This context is crucial for accurate year-on-year comparisons and understanding Stan's market position.
Telsyte actively monitors the SVOD services market, including over 40 SVOD services. Other examples include Apple TV+, BritBox, Crunchyroll, Foxtel Now, Hayu, Optus Sport and etc.
The measure is the number of subscriptions at the end of June 2024 (snapshot), not usage/utilisation. Content releases will influence the number of subscriptions when measured at different points in time.
Telsyte measures Amazon Prime Video as a subset of Amazon Prime – with measured subscribers self-reporting their use of the video service.
Telsyte measures the hours that consumers spend on consuming all types of video content. Examples include FTA TV, SVOD, social media videos, BVOD, FAST services etc.
FAST channels are curated scheduled channels that feature specific programs, genres or themes and offer an improved viewing experience of linear TV channels (e.g. a channel that is dedicated to ‘MasterChef’ or ‘shows from the 70s’). Examples of services that offer FAST channels include Samsung TV Plus, LG Channels, 7Plus, 10Play).

About Telsyte

Australia’s smart home market set to crack $2.5B, driven by AI, energy savings and security

March 20, 2024

Despite recent economic headwinds, Australians still interested in smart home tech with 7.6 million households now having at least one smart home product

SYDNEY, AUSTRALIA – Despite recent economic headwinds, Australians still interested in smart home technologies with 7.6 million households now having adopted at least one smart home product, with nearly 24 connected devices per home as of 2023, according to new research from the Australian emerging technology analyst firm, Telsyte.

The Telsyte Australian Smart Home Market Study 2023 found that Australia’s smart home market is set to crack $2.5 billion in revenue, driven by demand for energy efficiency, security, price increases, and the anticipation of the smart home concept greatly benefit from the technological advancements in generative AI.

Smart homes becoming mainstream even with the cost

As more electrical devices arrive on the market with computer “smarts”, Australian consumers now have more choice to make their home smart, but must continue to balance the opportunity with the costs.

Almost half (48%) of invested adopters (consumers adopted 5 or more types of smart home devices) say the current smart home offerings are not yet ‘smart’ enough, according to the study.

Telsyte’s research found in 2023 cost of living pressures outweighed the benefits of a smarter home with over half (59%) under increasing financial pressure and less looking to adopt energy optimising solution for their home to combat rising energy costs.

However, the overall trend remains clear: Cost of living pressures will not stop the transition to smarter homes and nearly a third of households now have five or more smart devices.

Robots, EVs and renewables ramp up the smart home

Smart appliance vendors are now committed to enabling ‘connected’ living with aircon, washing machines and fridges taking the lead among appliances consumers see as important to be ‘smart’.

The study found nearly one in five (18%) households have a vacuum robot with more general-purpose robots on the way. iRobot is still the leading brand of vacuum robot despite increased competition.

Surging energy prices continues to add pressure to household budgets with 74 per cent of Australians seeing their electricity bills increase in 2023; however, a sustainable home is still important to Australians during turbulent economic times.

In addition to cost savings and better energy efficiency, the study found 28 per cent of households want to reduce environmental impact with smart energy solutions and more are considering smart batteries for a complete solar solution.

More than half (61%) of solar owners have expressed interested in joining a Virtual Power Plan (VPP) program to help the environment and support their communities.

In the garage, high fuel prices tipping over new car buyers to EVs. Tesla still leads in sales, but EV models priced closely aligned to buyers’ expectations are proven popular.

Telsyte expects demand for home EV chargers set to rise with continued shortages in public spaces.

In-home AI begins to take hold

The past 12 months has seen a lot of hype around generative AI and services like ChatGPT, and Telsyte found device product marketing is shifting from ‘connected home’ to AI-enabled smart living.

“Australians will increasingly look for AI-powered smart living solutions that offer convenience, personalisation, and enhanced functionality,” Telsyte Managing Director, Foad Fadaghi, says.

New Gen AI voice assistants bring superior cognitive understanding of user intentions with advanced natural language processing, and 60 per cent of consumers believe AI can manage a smart home better than themselves. In addition, 43 per cent of people are keen on a smart home with advanced AI capabilities that enable seamless natural language communication and automate complex tasks.

The study found there were an average of 23.8 connected devices in the home in 2023 with 16.1 non-smart devices, 7.1 smart home devices and 0.5 provisioning devices (e.g. modems).

The average number of Internet-connected devices in the home is expected to grow by nearly 10 in the next 4 years and the average number of smart home devices set to grow by nearly half by 2027, equivalent to more than 353 million Internet-connected devices in total.

Telsyte forecasts the smart home market to be worth over $5 billion by 2027 with high value smart home products such as smart batteries, smart appliances and services to drive smart home market value. Smart appliances could make up around a third of all appliance revenue by 2027.

While smart speaker adoption is stagnating, AI-powered experiences are poised to set off the next adoption wave. Google is adding generative AI capability to its Google Nest smart speakers, which are already the main smart speaker for over half of user households.

How will all these AI-powered, connected devices interact? The emerging Matter standard poised to help unify disparate ecosystem.

A joint effort of more than 120 companies, including Google, Apple, Amazon, and Samsung, Matter is a smart home protocol aimed at unifying industry standards and allowing devices with different communication protocols across multiple platforms to communicate with each other.

Smart spaces hot with hybrid work here to stay

Being able to work from home or the office thanks to the pandemic has had a measurable impact on the spaces Australians are looking to improve, with the living room and study now the top smart spaces.

The lounge room, study and front entrance are the spaces where internet-connected devices were installed most in 2023, with the gaming room rising fast.

The study found more than a million (1.2M or 12%) Australian homes now have a dedicated workspace and another 500,000 (5%) households are interested in setting up a space dedicated to their hobbies and DIY.

Connectivity and convenience have joined security and energy efficiency as the top reasons for improving spaces in 2023 and Telsyte forecasts more investments will be made making the home office smarter.

Security and home care putting smart devices to work

In a positive step for the smart home trend, smart security surveillance and smart home care are putting smart devices to work helping with disability and aged care, and not just entertaining people.

Telsyte found 1.6 million (16%) households claim they have seniors or members with a disability that require special assistance or care, and among those households 1 in 3 (32%) are seeking additional help looking after these household members.

A further 37 per cent believe they will significantly benefit from the support provided by voice commands and more intelligent smart assistants.

This signals a new opportunity to implement assistive smart home tech in NDIS households.

The study also found 31 per cent of households have security surveillance systems, and self-monitored online security systems are on the rise with about half of the installed base.

Smart video cameras remained popular in 2023 with increased availability of AI features and more affordable products with the market now worth over $330 million.

Telsyte also found more people are acquiring security cameras from hardware stores and electricians, and more are relying on professional installation for smart security devices leading to boost in mixed mode installations.

Subscriptions are gaining some appeal as appliances get smarter

With most appliance vendors committed to enabling ‘connected’ living and aircon, washing machines and fridges are taking the lead among appliances consumers see as important to be ‘smart’. Smart lightbulb adoption has slowed during the economic downturn, but is expected to grow with more competitively priced units.

To pay for it all, the study found Australians remain moderately interested (16%) in hardware subscription services, but more potential adopters are interested in this model.

Those interested are willing to pay from $26 to $44 per month for each service. Home automation services, utility and insurance providers increasingly considered for subscription services.

The taxonomy of Telsyte's Australian Smart Home Market Study 2023:

IoT@Home segments covered:

For further information on the study or media enquiries contact:

Foad Fadaghi
Managing Director
Tel: 1800 313 142
Email: ffadaghi@telsyte.com.au

Alvin Lee
Senior Analyst
Tel: 1800 313 142
Email: alee@telsyte.com.au

The Telsyte Australian Smart Home Market Study 2023 is a comprehensive study which provides subscribers with:

Market sizing and forecasts of the Australian smart home market by detailed segments including services and installation revenues
Insights into consumer attitudes and technology adoption trends
Analysis of vendor strategies and key growth segments
Smart home user profiles, including adopters, those on the verge of adopting and those not yet to be interested.
Analysis of the smart home ecosystems
Analysis of retail and online channels and their importance to smart home products
Insights into where consumers begin with smart home journey and key market drivers expected to drive rapid adoption in different segments.

In preparing this study, Telsyte used:

An online survey conducted in August 2023 with a representative sample of 1,109 respondents, 16 years and older.
An online survey conducted in December 2022 with a representative sample of 1,036 respondents, 16 years and older.
Interviews conducted with executives from service providers, network operators, manufacturers, retailers, financial analysts and channel partners.
Financial reports released by service providers and manufacturers.
On-going monitoring of local and global market and vendor trends.

Editor’s note:

About Telsyte

Generative AI fuels Australia's booming IaaS market

March 5, 2024

Hyperscalers continue to dominate

SYDNEY, AUSTRALIA – Cloud applications and generative AI are the key drivers of Australia's soaring Infrastructure as a Service (IaaS) market, a new report from Telsyte, an Australian emerging technology analyst firm, reveals.

The report, titled Telsyte Australian Hyperscale Cloud Market Study 2024, shows that Australian organisations spent $4.4 billion on cloud infrastructure in 2023, a remarkable 25 per cent increase from the previous year.

The report also highlights the continued dominance of hyperscaler cloud providers, which accounted for an estimated 90 per cent of the IaaS market in 2023.

Telsyte predicts that the total IaaS market in Australia will reach $8B in revenue by 2027, propelled by growing cloud spending. Nearly half (40%) of Australian organisations plan to boost their cloud spending by 20 to 70 per cent in 2024.

Microsoft, through its partnership with OpenAI, is the leading Generation AI technology provider in Australia, with a solid presence in cloud services and productivity tools.

Generative AI, which can create novel content such as text, images, code, and music, is mainly delivered as a cloud service and fits well with most cloud applications. Natural language processing, code generation and reviews, and other use cases can be powered by cloud services.

Telsyte's research also shows that improved data analysis and insights are the top benefits that organisations expect from Gen AI.

In 2023, more than half (55%) of Australian organisations had already tried or implemented some form of Generative AI.

Cloud adoption high, but not yet mature

Cloud adoption and spending are high, but Australian IT leaders still face security and governance issues.

The study finds that cloud demand is high, with three out of four organisations considering private and public options, and only one in ten using public cloud services for less than two years.

Telsyte's cloud maturity index indicates that most of the market (71%) is shifting to more production workloads in the cloud, following the initial adoption phase.

A key finding of the study is that business units are now pushing for cloud adoption for their workloads. This is the main driver of cloud adoption, as business units do not want to wait for in-house IT to provide the infrastructure they need.

Cloud benefits such as access to new technologies and faster time to market are among the top five reasons for adoption.

Cloud challenges persist

Cloud is bringing many operational advantages to Australian organisations, but Telsyte research finds that almost all (97%) have at least one challenge with cloud.

The biggest challenges are "shadow" cloud, where business units buy cloud services without IT oversight; security; cost; and lock-in.

There is an opportunity for cloud consolidation, as two-thirds of Australian organisations use two to three different clouds, and a high 27 per cent use four to seven.

"Australian organisations have been early adopters of cloud, but in 2024 we expect to see more improvements in how cloud is used, with more maturity, more app development, and more focus on consolidation," says Telsyte Managing Director, Foad Fadaghi.

Cloud native apps gaining traction

The study shows that virtual servers are the most common IaaS application, but new areas such as serverless compute and storage are gaining popularity.

Infrastructure-as-Code (IaC), or deploying cloud infrastructure with code-level consistency and automation, is attracting high interest.

"The public clouds have enabled a new era of service automation for Australian enterprises, and there is a range of tools in use or being tested for Infrastructure-as-Code," Fadaghi says.

IaC is expected to be crucial for Generative AI deployments.

Hybrid cloud here to stay, skills needed

Telsyte's hybrid cloud research has been tracking adoption for eight years and shows that hybrid cloud is now mainstream in Australia, with eight in 10 organisations either testing or using it. Only 8 per cent have no plans for hybrid.

The preferred hybrid architecture is mainly cloud to on-premises, with cloud "bursting" also in use.

Telsyte's study also finds that there is a skills gap in Australia, with cloud networking skills in high demand and traditional database and security skills lacking in cloud.

For further information on the study or media enquiries contact:

Alvin Lee
Senior Analyst
Tel: 1800 313 142
Email: alee@telsyte.com.au

Foad Fadaghi
Managing Director
Tel: 1800 313 142
Email: ffadaghi@telsyte.com.au

The Telsyte Australian Hyperscale Cloud Market Study 2024 is a comprehensive study which provides subscribers with:

Market sizing and forecasts of the Australian cloud infrastructure services market
Analysis of market share and hyperscale performance
End-user trends in cloud computing
Strategic analysis of market opportunities for cloud infrastructure and MSPs

Telsyte’s study also includes profiles of the leading cloud vendors

Hyperscale profile: Amazon Web Services
Hyperscale profile: Google Cloud
Hyperscale profile: Microsoft Azure
Hyperscale profile: IBM Cloud
Hyperscale profile: Alibaba Cloud
Hyperscale profile: Oracle
Where VMware fits into the hyperscale clouds
Tier-2 clouds challenge hyperscalers: Telsyte forecast the rise of tier-2 clouds 3+ years ago. They offer low-cost scalability and growing range of hyperscaler features

In preparing this study, Telsyte used:

An online survey of 200 IT decision makers across Australian organisations with 20 or more employees. More than half of respondents were from large organisations (>200 employees)
Annual reports released by market participants
Interviews and discussions with cloud providers, third party service providers and carriers
On-going monitoring of local and global market trends

About Telsyte

Extended Reality (xR) market poised for growth

May 23, 2023

Apple’s headset could bring ‘X-factor’ for xR adoption

SYDNEY, AUSTRALIA – The launch of an Apple headset and the development of Extended Reality (xR) technology could boost the uptake of head-wearable devices in Australia, as consumers seek new ways to enhance their lifestyles, health and entertainment, according to new research from Telsyte, an Australian emerging technology analyst firm.

The Telsyte Australian Smartphone & Wearable Devices Market Study 2023 found that smart wearables grew in popularity with smart wrist and ear devices growing in adoption, with 36 per cent and 29 per cent population penetration respectively.

However, Telsyte expects head devices (headsets and glasses) to gain momentum with new powerful xR chipsets, partnerships such as the Qualcomm, Google and Samsung alliance, new and improved applications (for productivity, fitness and education) and highly anticipated products and games in 2023.

The xR market has been driven largely by enterprises, gamers and tech enthusiasts so far, but Telsyte’s consumer survey shows that more than one in four (27%) Australians are enthusiastic about its possibilities. This is three times that amount of individuals that are current adopters, about 1.5 million (6%) Australians at the end of 2022, a small rise of 4 per cent rise over the previous year.

Those interested in xR are drawn to various applications, especially entertainment, including games (38%), virtual tours (33%) and videos (31%). Sports, health and fitness applications also appeal to more than 1 in 5 (22%) consumers.

Manufactures have for years grappled with the balance between weight, tethering, comfort, and safety. The survey also showed that the majority (91%) of Australians prefer a wireless headset that works without cables. Telsyte believes battery life limitations are still a major impediment to smart headset adoption, especially for longer usage scenarios such as gaming and long-format video. This echoes the sentiment for wrist wearables, where battery life has been rated the most important selection criterion in the last two years.

The wearability of xR devices is another key factor vendors have been focusing on, with better weight and design optimisation. When selecting an xR headset, survey respondents say comfort and wearability measures are important to them, such as fitting of the headset (62%), weight (60%) and the ability to adjust lenses for their prescriptions (50%).

In addition to a “preference for real-world interactions”, the research found that those who are not interested in xR technology cite a lack of games and apps (24%), and the lack of interest among their friends and families (19%).

Apple could be a game-changer for xR adoption with a loyal user base and hungry developer ecosystem

Telsyte believes the potential release of Apple’s xR headset could accelerate the adoption of head wearables, alongside other new xR headsets, such as HTC’s VIVE XR Elite and Meta’s Quest Pro.

More than half (57%) of Australians aged 16 and older are already familiar with the Apple ecosystem and use different Apple devices and services that could complement and enhance the overall experience of an Apple headset.

Apple has a proven track record of attracting app developers and introducing successful new platforms. Telsyte’s latest measure found 37 per cent of Australian Apple users are considered loyal (using five or more different Apple products and services), up from 20 per cent two years ago.

Telsyte believes that this loyal base, which tends to buy more Apple devices and services, will be the early supporters of Apple’s ambitions in immersive technologies.

Apple is also well positioned to attract app developers to any new device category. Telsyte estimates that Apple’s App Store already has more than 140,000 AR apps for its iPhones and iPads, which could work with a xR headset at launch or soon after.

Those keen on xR are willing to pay an average of $733 for a headset, with 20 per cent ready to pay over $1,000. However, the Apple headset is expected to be significantly more expensive and designed initially for developers.

If Apple only releases a developer headset model in 2023, Telsyte estimates that it could sell between 10,000 and 40,000 units in Australia in the first year, depending on availability, price and the appeal to new enthusiasts. Telsyte expects Apple to follow up with a more affordable version, suited to smaller budgets as early as 2024, which could take off.

Telsyte forecasts the number of Australians using an xR headset could more than double to 3.3 million (12%) by 2027 based on scenario analysis.

“Introducing a new wearable device platform in 2023 would help energise Apple’s loyal developers,” says Foad Fadaghi, Principal Analyst and Managing Director at Telsyte.

“The key factor to Apple’s success or failure in xR will be third-party developers and application monetisation” Fadaghi says.

Extended Reality - xR is the collective term used to describe various immersive technologies including virtual reality (VR), augmented reality (AR), and mixed reality (MR).

For further information on the study or media enquiries contact:

Foad Fadaghi
Managing Director
Tel: 1800 313 142
Email: ffadaghi@telsyte.com.au

Alvin Lee
Senior Analyst
Tel: 1800 313 142
Email: alee@telsyte.com.au

The Telsyte Australian Smartphone & Wearable Devices Market Study 2023 is a comprehensive study that provides subscribers with:

Smartphone market sizing estimates, platform and vendor market shares and forecasts
Smart wrist-based wearables market sizing estimates, platform and vendor market shares and forecasts
Smart hearables market sizing estimates, platform and vendor market shares and forecasts
xR headset market sizing estimates and forecasts
End user trends across devices, application usage, platforms and operators
Purchase intentions and acquisition channels
Strategic analysis of recent market trends and developments

Telsyte measures smart wearable devices in the Telsyte Australian Smartphone & Wearable Devices Market Study 2023 as computing accessories:

Smart wrist wearables: worn on a user’s wrist typically paired and controlled via a smartphone. Examples includes products from Apple, Asus, Fitbit, Fossil, Garmin, Huawei, iFit, Misfit, Oppo, Samsung, Skagen, SPACETALK, TomTom, Withings and others.

Smart hearables: smart earbuds and headphones that support digital assistants and are typically paired with a smartphone. Examples include Apple Airpods, Samsung Galaxy Buds, Microsoft Surface Headphone and Google Pixel Buds.
xR headsets: VR, AR or MR headsets such as HTC Vive XR Elite, Meta Quest Pro, Microsoft Hololens, Pico 4, Sony PlayStation VR 2 and Steam Valve Index.

In preparing this study, Telsyte used:

Telsyte’s annual Digital Consumer survey conducted during January 2023 with a representative sample of 1,036 respondents, 16 years and older.
Interviews conducted with executives from service providers, network operators, manufacturers, retailers, financial analysts and channel partners.
Financial reports released by service providers, manufacturers and retailers.
Ongoing monitoring of local and global market and vendor trends.
Analyst reviews of leading smartphone and wearable devices.

Editor’s note:

Telsyte currently covers head wearables from HP, HTC, Lenovo, Magic Leap, Meta (Oculus), Microsoft, Pico, Sony, Vajor, Valve and others.

About Telsyte