GCC smart­phone de­mand on the in­crease

IDC says ship­ments of smart­phones to the coun­tries of the Gulf are up for first time in more than 18 months.

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BOUGHT A NEW SMART­PHONE LATELY?

Ship­ments of smart­phones to the coun­tries of the Gulf Co­op­er­a­tion Coun­cil (GCC) have in­creased for the first time since the first quar­ter of 2017.

Ac­cord­ing to IDC’s lat­est quar­terly Mo­bile Phone Tracker for Q3 2018, the smart­phone mar­ket’s growth to 4 mil­lion units in rep­re­sents a mod­est 1.1% in­crease quar­ter on quar­ter.

IDC added that it is a sig­nif­i­cant sign of sta­bil­i­sa­tion for a mar­ket that has suf­fered five con­sec­u­tive quar­ters of de­clines.

Fea­ture phones con­tin­ued to grow from strength to strength in Q3, with ship­ments to the GCC in­creas­ing 6.7% on a quar­terly ba­sis to reach 1.9 mil­lion units. This meant the over­all GCC mo­bile phone mar­ket saw a com­bined to­tal of 5.9 mil­lion units shipped in Q3, with Saudi Ara­bia and Kuwait driv­ing the mar­ket’s growth.

Saudi Ara­bia was the re­gion’s top-per­form­ing mar­ket in Q3, with over­all mo­bile phone ship­ments in­creas­ing 8.4% com­pared to Q2 of 2018.

“It seems the neg­a­tive ef­fects of Saud­i­s­a­tion and de­pen­dent taxes on the king­dom’s mo­bile phone space are los­ing mo­men­tum and the mar­ket is be­gin­ning to set­tle down again,” said Kafil Mer­chant, who is a re­search an­a­lyst for IDC.

“Ad­di­tion­ally, new reg­u­la­tions re­quir­ing phones to carry IECEE cer­ti­fi­ca­tion have helped boost of­fi­cial ship­ments at the ex­pense of grey mar­ket im­ports, while re­stric­tions on the king­dom’s 2G net­work have seen an in­flux of cheaper 3G and 4G smart­phones to fill the gap.”

Kuwait’s over­all mo­bile phone mar­ket saw growth of 2.6% in Q3 while the rest of the re­gion was char­ac­terised by de­clines, with over­all mo­bile phone ship­ments down 4.2% in Bahrain and 7.3% in the UAE.

“The UAE mo­bile phone mar­ket is be­ing ham­pered by an over­all lack of dis­pos­able in­come and job se­cu­rity in the coun­try, with the ef­fects be­ing felt across al­most ev­ery sec­tor,” said Na­bila Popal, a se­nior re­search man­ager at IDC.

“Even events like GITEX Shop­per that tra­di­tion­ally help boost elec­tron­ics sales failed to have a sig­nif­i­cant im­pact.”

IDC said Sam­sung main­tained its lead in Q3 with 31.2% share of the GCC mar­ket, de­spite suf­fer­ing a 3% de­cline in ship­ments. Ap­ple and Huawei fol­lowed with re­spec­tive shares of 25% and 18.7%.

IDC added that it ex­pects the over­all GCC mo­bile mar­ket to see a sin­gledigit de­cline year on year, with growth re­turn­ing again in 2019.

It seems the neg­a­tive ef­fects of Saud­i­s­a­tion and de­pen­dent taxes on the king­dom’s mo­bile phone space are los­ing mo­men­tum and the mar­ket is be­gin­ning to set­tle down again.”

- Kafil Mer­chant, IDC re­search an­a­lyst

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