Middle East phone market sees record decline

IDC reports a significant drop in mobile phone shipments compared to Q1 2015

Tags: Apple IncorporatedHuawei Technologies CompanyIDC Middle East and AfricaSamsung Corporation
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Middle East phone market sees record decline IDC’s Saad Elkhadem: "The challenging economic environment means that consumers are generally reluctant to spend more than is absolutely necessary on their mobile devices.”
By  Aasha Bodhani Published  May 25, 2016

International Data Corporation (IDC) revealed shipments of mobile phones decline 11.7% quarter-on-quarter in the Middle East in Q1 201, suffering its worst decline on record.

The market totalled 26.1m units for the first three months, which showed a significant drop from the 29.49m units shipped in the previous quarter. On a year-on-year perspective, shipments were down 12.5% from 29.78m units in Q1 2015.

"Once a technology that seemed to be in a perpetual boom, mobile phones are no longer immune to weakening consumer sentiment as the gloomy macroeconomic outlook begins to bite," said Nabila Popal, research manager for mobile phones at IDC Middle East, Africa, and Turkey.

"The market's decline is being spearheaded by the one-time stalwarts of Turkey, the UAE, and Saudi Arabia, with shipments in these countries down 13.2%, 12.7%, and 10.4%, respectively, in Q1 2016 when compared with the previous quarter. The rest of the GCC countries also saw declines, with the exception of Qatar; although even then, the growth was a very modest 1.3%," added Popal.

In terms of operating systems, Android's share of the regions smartphone market continues to rise, reaching 86.4% in Q1 2016, however Apple's iOS shipments were down by 28.8%. From a vendor perspective, Samsung, Apple, and Huawei continue to lead the way in the smartphone segment, with shares of 42.1%, 13.0%, and 8.6%, respectively.

Of the top three vendors, only Samsung recorded quarter-on-quarter growth in share and shipments, with the successful launch of its Galaxy S7 flagship spurring a 6.6% increase in units. This compares very favourably to declines over the same period of 28.8% for Apple and 14.5% for Huawei.

"The challenging economic environment means that consumers are generally reluctant to spend more than is absolutely necessary on their mobile devices," said Saad Elkhadem, a research analyst for mobile phones at IDC Middle East, Africa, and Turkey. "As such, vendors are increasingly pushing their mid-range devices in an attempt to provide consumers with a good balance between value and features. The Samsung J series, which is mostly priced under $200, is a prime example of this new focus, and it is already responsible for a large portion - about a third - of Samsung's Middle East shipments."

IDC points out that this strategy is not a new path to success, as Huawei and Lenovo have long since staked their reputations on devices priced under $300, with these low to mid-range phones accounting for 81% and 94% of their Middle East shipments. Even Apple has recently attempted to enter the mid-range segment once again, this time with the iPhone SE, although the fate of this device remains to be seen.

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