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Saudi Arabia drives GCC mobile phone shipments up 8% in second quarter

(Image credit: Future)

The overall mobile phone shipments in the Gulf Cooperation Council (GCC) countries grew 8% quarter on quarter to 6.5m units in the second quarter of this year.

Nabila Popal, senior research manager at International Data Corporation (IDC), told TechRadar Middle East the smartphone market performed especially well with quarter-on-quarter growth of 8.9% and totalled 4.7 million units.

She said the growth came mainly from the expansion in the Saudi Arabian market, a 17.1% quarter-on-quarter growth in volume, as a result of stabilisation and recovery.

“There were also gains in the UAE and Qatar, which posted a 7.4% and 8% quarter-on-quarter unit growth respectively in the second quarter.”

Moreover, she said that low-end ($100-$200) and mid-range ($200-400) smartphones have been consistently growing in popularity in the first half of last year and these two price bands together hold 56.1% unit share in the first half of this year in the GCC countries compared to 42.4% unit share in the first half of last year.

Akash Balachandran, senior research analyst at IDC, said that smaller countries in the GCC like Kuwait, Bahrain and Oman have seen contractions during the quarter due to a new levy, difficult job market and changing government policies impacting consumer spending.

“Huawei did experience a decline at the end of second quarter (directly as a result of the news on the US Huawei ban), high shipments earlier in the quarter ensured it didn’t face a steep contraction in share during the quarter – especially as sellout of mid-range devices which make up the bulk of shipments was less affected,” he said.

(Image credit: Future)

Bright outlook

Samsung was the leader due to the success of its A-series, particularly the A10 & A20 models, which performed exceedingly well.

Shobhit Srivastava, research analyst for mobile devices and ecosystem at Counterpoint Research, said that some markets in the region are highly underpenetrated, pointing to a growing smartphone market trend but the lack of economic and political stability in many countries in the region still holds a concern over true growth of the Middle East and Africa market.

“Some markets in the Middle East are also highly penetrated in terms of smartphone adoption and hence are going towards decline but overall we estimate MEA market to grow by single-digit annually in 2019,” he said.

Looking ahead, Popal said the overall mobile phone market in 2019 is expected close with a 3.5% year-on-year growth in shipments in the GCC, fuelled by a 10.1% year-on-year volume growth. The feature phones market is expected to decline.

The long outlook for the market is quite positive as more 5G devices are going to enter the market.

In the long term, IDC is expecting a 2.9% five-year compound annual growth rate by 2023. 

Srivastava said that 5G devices will rejuvenate the global smartphone market next year compared to a fall this year as consumers are holding on to their devices without replacing.

He said that the replacement period for iPhones is 36 months and 30 months for Android devices as the smartphone industry lacks real innovation and the innovation that came in was the full-screen display and more cameras on a phone.

Major adoption of 5G devices in 2020

As in the early age for 5G smartphone, Mo Jia, analyst at Canalys, said that the operators need time to improve the 5G coverage and added that the device vendors need time to further lower the smartphone prices.

“We expect very minor adoption to 5G in 2019, however, with 5G smartphones going below $300 or even $200 in 2020, millions of 5G smartphones will be shipped in a single quarter in 2020, and China, will become the largest 5G smartphone market,” he said.

Canalys forecast 13 million 5G smartphones to be shipped in 2019 globally (1% of the global smartphone shipment), and 164 million in 2020 (12% of the global smartphone shipment), with China leading 69 million annual shipment, taking 42% of the global volume.