Samsung, Huawei trump Apple in ME smartphone shipments
dubai — Mobile shipments in the UAE declined 10 per cent quarter on quarter in Q3 2016, while Qatar, Bahrain, Kuwait and Oman fell a combined 4.1 per cent over the same period, new research has shown.
Low oil prices, constrained government spending and a lack of innovation have continued to impact the mobile phone market across the GCC and the Middle East, resulting in a decline in mobile shipments.
Figures announced by the International Data Corporation (IDC) show that the Middle East mobile phone market suffered its third consecutive quarter-on-quarter decline in Q3 2016; and that shipments in the region totalled 23.8 million units, down 0.7 per cent on the 23.9 million units shipped in Q2 2016. Given that the quarter-on-quarter decline in Q2 2016 was much steeper at 8.5 per cent, the silver lining in these latest figures is that the rate of decline seems to be flattening out.
In addition, Q4 is traditionally the best quarter of the year for mobile shipments, so IDC expects the market to see modest growth of eight per cent quarter on quarter and 8.1 per cent year on year in Q4 2016.
“The Middle East is no longer one of the strongest areas of growth on the global smartphone map and its fall from this position has been rapid,” says Simon Baker, senior programme manager for mobile phones at IDC CEMA. “A new middle tier is emerging in the region’s smartphone market and the old polarisation between entry level and the top end is fading. In other words, the Middle East is becoming more like markets in other parts of the world.”
IDC’s research showed that every country in the GCC recorded quarter-on-quarter declines in Q3, 2016, with Saudi Arabia suffering the biggest dip at 18.3 per cent.
“The underlying reason for the overall decline seen across the GCC is the continuation of low oil prices and constrained government spending in the region,” says Nabila Popal, research manager for mobile phones at IDC MEA.
“The lack of overall innovation in the smartphone industry and the flattening of price declines have also reduced consumer demand for upgrades, thereby lengthening the refresh cycle. This marks the dawn of a new era for the smartphone market, since these two factors were the main drivers of the high double-digit growth rates the industry had previously become accustomed to. As such, I expect the smartphone market to see flat or modest growth at best until the next big innovation comes along,” Popal explained.
Channels and retailers in the region are struggling to keep up with these developments, and are now seeing major consolidation occurring in the market. Declining demand and diminishing margins have even caused some of the largest and most established players to cut costs, trim their headcounts and look for alternative non-mobile business opportunities.
Despite the woes Samsung faced with the need to recall all its Galaxy Note 7 phones, shipments of which are not recorded in IDC’s Q3 2016 report, the vendor continued to lead the Middle East smartphone market with almost 35 per cent share. Its shipments were down just three per cent quarter on quarter, which given all the company went through, is a huge achievement. Huawei followed in second place with 14.4 per cent share, with third-placed Apple pulling in just over 11 per cent despite the launch of its iPhone 7. A shortage of supply for the iPhone 7, together with reduced supply of Apple’s older models, was behind this performance. IDC expects Apple to rebound in Q4.
— rohma@khaleejtimes.com