Australian consumers bought more premium smartphones in the first half of 2026, according to Telsyte research, with devices priced above AUD $1,000 making up 56% of sales.
Total smartphone sales reached 3.87 million units in the half, up 1% from a year earlier. More than one in five handsets sold were in the ultra-premium segment above AUD $2,000, and the premium category has gained 10 percentage points of share over the past two years.
The figures suggest a market that is holding steady in volume while shifting further towards higher-priced devices. Buyers have continued to spend on top-end models even as cost-of-living pressure persists and refurbished phones attract more attention.
Apple took 49.4% of first-half smartphone sales, bringing it close to parity with Android in the Australian market. iPhone sales rose 7% year on year, while Android volumes fell 5%, with the decline concentrated in sub-premium devices.
Premium Android handsets still recorded growth, underlining strong demand at the top end of the market. Apple, Samsung and Motorola were the three largest vendors, while Motorola and Oppo remained closely matched after trading third and fourth place several times over the past two years.
Some iPhone buyers appear to have brought forward upgrades amid expectations that component costs will flow through to higher retail prices. Inventory shipped into the market ahead of rising memory and component costs has so far helped keep pricing broadly stable.
That buffer is now thinning. Stock replenished at current costs is likely to lead to broader price rises in the second half of the year.
Telsyte forecasts 8.4 million smartphone sales in Australia for 2026, down 3% from the previous year. It expects the decline to be concentrated in the second half as higher component costs spread more widely across the market.
Upgrade cycle
Demand remains concentrated in the premium tier as consumers treat phones as longer-term purchases and seek to future-proof their next device. At the same time, Australia's average smartphone replacement cycle has shortened to 3.4 years from a peak of 3.9 years at the end of 2023.
The contraction has been sharper among Android users than iPhone users. Telsyte found the Android replacement cycle has compressed by 0.7 years, compared with 0.4 years for iPhone owners, reflecting the impact of the 2024 closure of 3G networks on lower-cost handsets.
Budget users now keep devices twice as long as ultra-premium buyers, concentrating the most active upgraders at the top of the market. That group is also the main audience for features such as device-integrated artificial intelligence and newer formats including foldables.
Even so, newness still matters to most buyers. Telsyte found 85% of Australians prefer to buy a new smartphone, with many managing affordability by choosing an older flagship model or switching brands.
Use of artificial intelligence on phones is already widespread. More than 11 million Australians use built-in AI features on smartphones for tasks including writing assistance, photo editing and live translation.
Yet AI is not the main driver of purchase decisions. Only one in three respondents said their next smartphone must include advanced AI features, while battery life, performance and storage remained the leading considerations.
Consumer attitudes to AI also remain cautious. While 58% said they were willing to allow AI access to selected apps and information on their device, only 21% said they were comfortable with AI suggesting actions without being asked.
Foldable interest
Foldable smartphones now account for about 5% of annual smartphone sales in Australia, according to the study, but the category remains outside the mainstream. The research suggests Apple's absence is a central reason.
Consumer interest in a foldable iPhone is significant, particularly among owners of Apple's higher-end models. One-third of iPhone users said they would consider a foldable iPhone, rising to 46% among users of the iPhone 15, 16 and 17 Pro series.
Among those Pro series users, 17% said they would pay AUD $3,000 or more. Telsyte estimates any foldable iPhone would likely carry a 30% to 40% premium over the iPhone Pro Max, placing it firmly in the ultra-premium segment.
The study pointed to the possible effect on the broader category. "Despite the potential lofty prices, a new foldable iPhone could finally propel the category into the mainstream," said Foad Fadaghi, Principal Analyst, Telsyte.
Samsung is expected to remain the leading foldable vendor, helped by the widest range in the segment. Preferences differ by platform, with iPhone users split evenly between larger book-style devices and smaller flip models, while Android users show a clearer preference for the book-fold design.
Wearables shift
The study also tracked mixed performance across wearable devices. More than 800,000 smart wrist wearables were sold in the first half, down 8% year on year, with Apple, Samsung and Garmin leading the market. Smartwatches accounted for more than 70% of sales.
Smart hearables performed more strongly, with sales above 1.2 million units, up 16% from a year earlier. Growth was driven by new product releases, bundling and a lower-cost upgrade path than other personal devices.
Smart rings and smart glasses remain at an early stage. Fewer than 5% of Australians own a smart ring, while interest stands at 29%.
Interest in smart glasses is notably higher, with 66% saying they would consider one. More than two-thirds of current owners wear Meta AI glasses, including Ray-Ban and Oakley-branded models.
The appeal centres on practical use rather than novelty. The most sought-after features were hands-free photo and video capture, real-time information about what users see and reduced phone use.
"AI is moving from something Australians open to something they wear," said Alvin Lee, Senior Analyst, Telsyte.