GCC mobile market tipped for recovery in 2018
dubai — The GCC mobile phone market remained relatively flat in second quarter of 2017, according to the latest figures announced by International Data Corporation (IDC) on Thursday.
The global technology research and consulting firm’s newly released quarterly mobile phone tracker shows overall shipments for the quarter totaled 6.4 million units, representing a minor decline of 1 per cent quarter-on-quarter (QoQ) basis and 1.3 per cent on year-onyear (YoY) basis.
This contrasts starkly with the steep 20.2 per cent YoY decline seen in first quarter of 2017, suggesting the market is beginning to show some welcome signs of recovery. There were contrasting fortunes in the GCC’s two biggest markets, with the UAE growing 1.6 per cent quarter on quarter and Saudi Arabia suffering the region’s largest decline at 4.2per cent.
“Saudi Arabia continues to face major challenges with its macroeconomic situation, while the Saudization of the kingdom’s mobile phone industry continues to negatively impact the market,” says Kafil Merchant, a research analyst at IDC Middle East, Africa, and Turkey.
“This policy has caused a shift away from independent retail, with consumers gradually moving to the organised retail channel, which is heavily engaging with vendors to provide more attractive prices and offers. The independent retail channel is experiencing a major slowdown as a result of restrictive credit limits and lower marketing support from vendors.”
“However, the declines seen recently in the overall Saudi mobile phone market are expected to reverse by the end of the year as the market gradually adjusts to these changes.”
Despite the recent political issues surrounding Qatar, shipments of mobile phones to the country have not declined.
“As a result of the embargo, gray shipments into the country have actually decreased,” says Nabila Popal, senior research manager for mobile phones, AR/VR, and displays at IDC Middle East, Africa, and Turkey.
In terms of the vendor landscape, Samsung continued to lead the GCC smartphone market in second quarter of 2017 with 38.1 per cent unit share, posting a 0.4 per cent QoQ increase in shipments. The regional launch of the vendor’s flagship S8 and S8+ models did not live up to expectations with the average selling price (ASP) falling sharply over a short period.
Apple remained in second place with 20.9 per cent share but saw its shipments decline to 20.2 per cent QoQ basis.
“This downturn experienced by Apple is partly a seasonality issue and partly due to anticipation around the launch of the new iPhone in fourth quarter of 2017,” says Ms Popal.
“Additionally, it is worth noting that after focusing for a long time on the volume game, brands in the region are now shifting to a valuedriven strategy and paying closer attention to their bottom lines instead of their top lines.”
However, it is interesting to note that iOS shipments were up five per cent Year on Year in Q2 2017.