Is the Gulf's love affair with the smartphone waning?

Key markets of UAE and Saudi Arabia see drops in demand during Q3; forecast for 2018 also negative

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Is the Gulf's love affair with the smartphone waning? The Quarterly Mobile Phone Tracker showed overall shipments for the quarter totalled 6.4 million units.
By  Staff Writer Published  December 15, 2017

The Gulf's mobile phone market remained flat in the third quarter of 2017, according to latest figures from International Data Corporation (IDC).

The global technology research and consulting firm's Quarterly Mobile Phone Tracker showed overall shipments for the quarter totalled 6.4 million units, up by just 0.1% quarter on quarter.

Shipments of smartphones declined 4.9% during the quarter, but this was offset by a 13% increase in feature phone shipments, which helped deliver a semblance of stability to the overall mobile phone market.

Strong demand for Nokia's new range of feature phones was the main driving force behind the growth seen in this segment during Q3, IDC said.

The performance of the individual country markets varied significantly, with Oman and Saudi Arabia seeing shipments of mobile phones increase 5.5% and 2.6%, respectively, when compared to the previous quarter.

The UAE, Kuwait, and Bahrain suffered respective declines of 4.4%, 4.8% and 6.3% over the same period.

Looking ahead, IDC said it expects the overall GCC mobile phone market to decline by 4.3% year on year in 2018.

The key markets of the UAE and Saudi Arabia are tipped to suffer declines of 8.2% and 5.7%, respectively, due to challenging macroeconomic conditions, policy changes and the introduction of VAT.

IDC said it expects the GCC market to start its recovery in the following year.

"The decline in smartphone shipments comes after years of continuous growth and can be attributed to a variety of reasons," said Nabila Popal, senior research manager for mobile phones, AR/VR, and displays at IDC Middle East and Africa (MEA).

"Changes in consumer behaviour have resulted in refresh cycles becoming longer, while the lack of truly innovative, differentiating features incorporated within new models is also hampering demand. We have also seen a change in some vendor strategies as they switch their focus from volume to value."

In the smartphone category, Samsung and Apple remained the key volume movers in Q3, with respective market shares of 39.6% and 20.7%.

IDC said that in light of the challenging market conditions, many brands have looked to consolidate their market positions and implement leaner operating models in a bid to reduce costs.

"The region's mobile phone market is clearly going through a challenging period, and it is the brands that remain most relevant to consumers that will be best positioned to sustain the market during and after this difficult phase," added Isaac T Ngatia, a senior research analyst at IDC MEA.

Source: Arabian Business

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