According to the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, the Australia smartphone market declined by 10.1% Year-on-Year (YoY) in 2Q23, shipping 1.26 million units.

The consumer demand remained subdued for most of 2Q23 but there was recovery in June as the end-of-financial-year sales lured consumers to attractive deals on smartphones.

The average selling price (ASP) increased by 5% YoY in 2Q23 but experienced a 10% QoQ drop, reaching US$755.

Smartphones above US$1000 continued to grow as consumer preference for the flagship smartphones remained resilient whereas smartphones in the mid-price segment faced the brunt of the drop in demand. The low-end segment also revived with growth in the prepaid market.

Yash Gupta, Lead Analyst for Mobile Phone Research at IDC Australia, says, "Consumers are uncertain about the economic situation, which is causing them to hold onto their wallets tightly. Consumer demand is expected to remain subdued due to the recent cost-of-living pressures, and the ongoing rise in interest rates continues to weigh on domestic demand."

Amid economic instability, most of the vendors saw a YoY decline in the market, majorly affecting the open channels, while carriers remained resilient, IDC states.

Despite maintaining ample inventory, a decrease in consumer demand was evident. To sustain the market, vendors and channels introduced discounts and offers. However, even with these price discounts and promotions, the market was still affected by the drop in consumer demand.

2023 outlook

Economic activity is projected to continue at a slower pace throughout the entirety of 2023 and going into 2024, resulting in GDP per capita declining over this period.

While End of Financial Year sales in June/July, as well as events like Black Friday and Boxing Day sales, are expected to contribute to a partial recovery, the overall consumer demand in the market has been adversely affected by economic factors. This is anticipated to result in a high single-digit YoY decline in shipment numbers for the year 2023.

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