The company said its estimates were that about 16 million tablets were sold in the second half of 2018, 21% less than the corresponding period a year earlier.
Apple stayed in the lead, with the new iPad 9.7-inch device the most popular due to its price. In terms of market share, iOS took 49.6%, Windows 29.9%, Android 19.3% and Chrome 1.2%.
Apple's share was up by 5.1% and Windows by 2.1% while Android went in the other direction, falling by 21%.
Telsyte said the 2-in-1 category had passed its early growth phase and about 3.5 million Australians now owned one, with more than 70% being Windows devices.
Sales were expected to fall further as users continued to hold onto their devices longer, with the average replacement cycle now standing at 3.1 years, up 0.6% from 2017.
About 15.7 million Australians had access to a tablet by the end of 2018, making it a very mature segment of the market.
The analyst firm said given that 5G, eSIMS and bigger mobile data plans were arriving, there was plenty of potential in the market.
“The arrival of 5G will likely spur further interest for connected tablets, potentially amongst gamers due to lower latency,” Telsyte senior analyst Alvin Lee said.
Interactive gaming was a big reason for tablet purchase and this would continue to be a driving factor, Telsyte said.
More than 60% of children (under 18) had access to a tablet at the end of 2018 and the majority (81%) were using it at least a few times a week, averaging two hours a day.
“More cost-effective 2-in-1 devices designed for the education market are likely to be popular in coming years,” said Lee.
In the smart speaker segment, Telsyte said 16% or 1.6 Australians were using at least one device. A growing number, below 5% at the moment, were using smart speakers with displays.