Melbourne, Jan 24 (AFP) American veteran Serena Williams sensationally crashed out but 15-year-old Coco Gauff went through as tennis got a glimpse of its past and future at the Australian Open on Friday.

Williams' bid for a record-equalling 24th Grand Slam was halted by the unlikely figure of China's Wang Qiang, who triumphed in three tough sets -- after winning just one game when they played at the US Open in September.

Gauff then stepped up her giant-killing Melbourne debut as she ousted Japanese defending champion Naomi Osaka, 22, in dismissive style, winning 6-3, 6-4 in just 67 minutes to reach round four.

"Oh my gosh. Two years ago I lost first round in the juniors and now I'm here -- this is crazy," said the teenager, who upset Venus Williams in the first round.

With Williams now 38, 23 years older than Gauff, the two players are at opposite ends of their careers.

And with Williams' close friend Caroline Wozniacki retiring on Friday, after defeat to Ons Jabeur, it looked like a changing of the guard.

But Williams, who has now had eight winless Grand Slams since returning from childbirth, said she hadn't given up hope of matching Margaret Court's 47-year-old record for Grand Slam titles.

"I definitely do believe (I can equal it) or I wouldn't be on tour," said Williams, a seven-time winner at Melbourne Park.

Williams was the bookies' favourite to lift the trophy for the eighth time but she came unstuck against a determined Wang, who won 6-4, 6/7 (2/7), 7-5.

- 'People thought I was crazy' -

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Her defeat came just minutes after Denmark's Wozniacki was knocked out by Tunisia's Ons Jabeur, bringing a tearful end to the former world number one's final tournament before retiring.

"I had a dream when I was a kid. I wanted to win a Grand Slam. I wanted to be number one in the world," said Wozniacki, the Melbourne winner in 2018.

"People thought that I was crazy being from a small country. But I made it happen."

Williams' exit removes a major hurdle for Australia's world number one Ashleigh Barty, 23, who had been on course to meet her in the semi-finals.

Barty, bidding to become the first Australian champion since 1978, hit form in a 6-3, 6-2 demolition of Elena Rybakina, saying she had played her best tennis so far this year.

"I felt I needed to be really switched on for this," Barty said.

"I feel it's the best I've played this summer so far." Gauff, who trained with Serena Williams in the off-season, had promised she would be less nervous than in her last meeting with Osaka, when she was thrashed in round three of last year's US Open.

And so it proved as the teenager broke once in the first set and twice in the second to floor a rattled Osaka and ramp up a rivalry that could run and run.

In the men's draw, reigning champion Novak Djokovic thrashed Japan's Yoshihito Nishioka 6-3, 6-2, 6-2 to reach the round of 16 at a canter.

Former US Open champion Marin Cilic, 31, outlasted Robert Bautista Agut in five tough sets and Tennys Sandgren, under fire during his last deep run in Melbourne over links to right-wing activists, beat fellow American Sam Querrey in straight sets.

In Friday's night match, Roger Federer will need to avoid a second Grand Slam upset at the hands of home favourite John Millman, after the 2018 US Open, to bring up 100 Australian Open wins. (AFP)

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