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Tablet sales in Australia slid by 28% in the first half of this year compared with the last six months of 2013 and Apple’s iPad was outsold in Australia, for the first time, by Android-based devices.

According to a study just released by Telsyte, there were 1.8 million media tablets sold in Australia in the first half of this year - a decline of 28% decline from the previous six months – but despite this, the analyst firm says the population penetration of media tablets increased to 46%, or 10.8 million people at the end of June.

Telsyte says that following three solid years of growth, the impact of a slowing demand was exasperated with the traditionally slower first half retail cycle, and the fact that longer upgrade cycles are impacting new sales with the market now “in a lull as customers wait for a reason to upgrade”.

And, while Google's Android tablets just outsold Apple's iPad over the first half of the year, Telsyte says it expects the trend will likely reverse in the second half. It also says that Windows-based tablets are gaining ground in the market-share stakes.

Telsyte managing director, Foad Fadaghi says that while sales of Android-based units “just edged out Apple for the first time,” in the six months to 30 June, Apple will be restored to the number one place by year’s end.

According to Telsyte, more Android units were sold for the first time in Australia in the first half of 2014, following global trends “despite Australia’s love affair with Apple products.”

The report reveals that Apple has retained 46% tablet market share, with the rest of the market being made up of Android (47%) and Windows-based devices (7%).

The most popular tablet in use, says Telsyte, remains the iPad 2 which was originally released back in March 2011, and despite its age is expected to be able to run Apple’s latest mobile operating system iOS8, due to be released alongside the new iPhone 6 in September.

“Apple should have a strong second half if it can bring upgraded models to market and benefit from a halo effect created by the iPhone 6 launch,” Fadaghi says.

“More than half of iPhone users already have an iPad, whether consumers upgrade both this year will be the question many will be asking.”

According to Fadaghi, Telsyte surveys are showing greater purchase intentions for iPads overall in H2, and higher repeat purchase intentions by existing iPad users than Android tablet users.

Telsyte also observes that low-end devices continue to flood the market putting pressure on premium Android tablet sales. And despite Android units outselling iPads for the first time, Android only captured a third of the market in terms of dollar value.

For the second half of this year, Telsyte forecasts 2.1 million tablet units to be sold, which it says will be influenced by a strong smartphone purchasing cycle expected to start in October. The analyst firm also says it believes new smartphone sales might delay purchases of new media tablets for many existing users until 2015 and beyond.

“A tablet upgrade cycle might not commence until current devices become more readily obsolete, either in terms of computational capability, operating system, application interoperability, graphics or connectivity,” Fadaghi says, adding that the ability to work with wearable devices or sensors “might be a driving factor for upgrades.”

According to Telsyte, the demand for smartphones is expected to be nearly three times more than media tablets for this current second half of the year.

Fadaghi said Telsyte research has also shown the impact of phablets on the purchase intention of tablets in H2 is marginal, with only 5% less likely to be considering buying a new tablet in H2, if using a phablet currently, compared to standard smartphone users. “This might change following the impact of a larger screen iPhone 6,” Fadaghi concludes.

To read the full Telsyte report go here

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Peter Dinham

 

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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