Over Half Australian Smartphone Sales Are Premium Devices But Foldable Phones Are Waiting For Apple

More than half of all smartphones sold in Australia in the first half of 2026 were premium devices priced above $1,000, with more than one in five costing above $2,000, according to new research from Australian emerging technology analyst firm, Telsyte.

The ultra-premium segment is now a defining feature of the local market. The Telsyte Australian Smartphone & Wearable Devices Market Study 2026 found premium handsets accounted for 56 per cent of first-half sales, adding 10 percentage points of share over the past two years.

Total smartphone sales reached 3.87 million units in the first half, up one per cent year-on-year, but the growth was uneven. Apple accounted for 49.4 per cent of first-half sales, bringing it within reach of parity with Android. iPhone sales rose seven per cent while Android volumes fell five per cent, with weakness concentrated in sub-premium handsets. Premium Android volumes continued to grow.

Apple, Samsung and Motorola are the top three vendors. Motorola and Oppo are separated by a slim margin, having traded third and fourth positions several times over the past two years.

Component costs threaten second-half pricing

Telsyte believes some iPhone buyers have brought upgrades forward amid reported expectations of component-driven price increases. The first-half result was also driven by inventory brought into the market ahead of rising memory and component costs, which kept retail pricing broadly stable and insulated buyers from underlying cost movement.

That buffer is thinning. Telsyte believes stock replenished at current input prices will bring more widespread retail increases through the second half of 2026.

The firm forecasts 8.4 million smartphones will be sold in Australia across the full year, down three per cent year-on-year. The decline is expected to be weighted towards the second half as memory-driven cost increases are reflected more broadly across the device range.

Demand is expected to remain concentrated in the premium tier, supported by consumer intent to future-proof their next device and treat it as a long-term investment.

Replacement cycles compressing

Australia’s average smartphone replacement cycle has shortened to 3.4 years, down from a peak of 3.9 years at the end of 2023. The decline is most pronounced among Android users, whose cycle has compressed by 0.7 years compared with 0.4 years among iPhone users. That gap reflects the concentrated impact of the 2024 3G network closure on lower-cost handsets.

Budget users now hold their devices twice as long as ultra-premium buyers, concentrating the most commercially active upgraders at the top of the market. That segment is the primary audience for premium devices, on-device AI and next-generation form factors such as foldables.

Apple and Samsung lead the premium and ultra-premium tiers, where competition from brands including Oppo, Google, Motorola, Nothing and Honor is intensifying as more players push upmarket.

Despite persistent cost-of-living pressure and the increasing popularity of refurbished phones, 85 per cent of consumers still prefer to purchase a new device. Many manage affordability by choosing last year’s flagship models or switching brands.

AI widely used but not yet a purchase driver

More than 11 million Australians are using device-integrated AI features on their smartphones, from writing assistance and photo editing to live translation, making the smartphone the most widely used AI device in the country.

Only one in three consumers, however, indicate their next smartphone must include advanced AI features. Battery life, performance and storage remain the dominant purchase considerations.

While 58 per cent are willing to allow AI access to selected apps and information on their device, only 21 per cent are comfortable with AI suggesting actions without being asked.

Foldables at five per cent and waiting for Apple

Foldable smartphones now account for approximately five per cent of annual sales in Australia but have not crossed into the mainstream. Telsyte believes an Apple foldable would be a major catalyst for the category.

Consumer appetite for an Apple foldable is strong. One third of iPhone users would consider a foldable iPhone, rising to nearly half, or 46 per cent, among users of the iPhone 15, 16 and 17 Pro series. One in six of those Pro series users would pay $3,000 or more, placing early demand in the segment that already spends the most.

If Apple launches a foldable iPhone in 2026, Telsyte believes it could become the second-largest foldable vendor in Australia within its first year, assuming supply is not constrained.

Telsyte estimates a price premium of 30 to 40 per cent above the iPhone Pro Max, placing the device in the ultra-premium tier. Samsung is expected to retain the foldable lead with a broad line-up that includes a newly designed passport-style Galaxy Z Fold 8.

iPhone users are evenly split between the larger book-fold style and the more compact flip form factor, against a clearer preference for the book-fold format among Android users at 58 per cent.

Telsyte Principal Analyst, Foad Fadaghi, told the study: “Despite the potential lofty prices, a new foldable iPhone could propel the category into the mainstream.”

Wrist wearables soften as hearables surge

More than 800,000 smart wrist wearables were sold in the first half of 2026, down eight per cent year-on-year as the category matures and budgets tighten. Apple, Samsung and Garmin lead the segment, with smartwatches accounting for more than 70 per cent of sales.

Demand is now driven by ecosystem lock-in, fitness and health sensing upgrades and deeper assistant integration rather than first-time adoption.

Smart ring adoption remains embryonic. Fewer than five per cent of Australians own one, with Samsung leading the category. Interest sits at 29 per cent, reflecting the fitness and health tracking that wrist wearables already deliver to a far larger installed base.

Smart hearables were a brighter spot. Sales reached more than 1.2 million units over the same period, up 16 per cent year-on-year, driven by new product releases, bundling and a more affordable upgrade path than other personal devices.

Close to half of hearable users, or 48 per cent, wear their devices daily, and more than a quarter use voice features every day, making hearables a natural companion to on-device AI.

Telsyte Senior Analyst, Alvin Lee, remarked: “AI is moving from something Australians open to something they wear.”

Smart glasses interest outpaces adoption

Smart glasses ownership remains embryonic, though interest runs well ahead of smart rings. Two thirds of consumers indicate they would consider a pair.

More than two thirds of current owners wear Meta’s AI glasses, including Ray-Ban and Oakley branded models. The features drawing the most interest are hands-free photo and video capture at 28 per cent, real-time information about what the wearer sees at 23 per cent and reduced phone usage at 22 per cent.

Telsyte expects sub-$100 glasses and premium ecosystem entrants to broaden the category over the next twelve months. Social and privacy concerns, however, are likely to persist. Nearly half of Australians, or 47 per cent, indicate they would feel self-conscious wearing smart glasses in public, and only 30 per cent are comfortable with people around them regularly wearing camera-equipped smart glasses.

Last Updated on August 17, 2026 by Nick Ross