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Smartphones drive GCC phone shipments to 6m in first quarter

Mobile phone shipments into the six Gulf Cooperation Council countries (Saudi Arabia, UAE, Oman, Kuwait, Qatar and Bahrain) stood at 6 million units in the first quarter of this year, registering a minor growth of 1.1% year on year due to various factors.

Akash Balachandran, a senior research analyst at IDC, said that the GCC mobile phone market has faced a number of challenges over the past year, brought about by a combination of unfavourable macroeconomic conditions, changing government policies, and a lengthening of the smartphone refresh cycle.

However, when viewed against the major declines that characterized much of 2018, he said the quarter on quarter growth figures for the first three months suggests a degree of stabilization in the market.

Smartphones grew 5.5% year on year while feature phones fell 8.7% in the first quarter.

According to research firm International Data Corporation (IDC), market’s growth was spurred by smartphones, which stood at 4.3 million units, while feature phones segment continued its decline to 1.7 million.

Saudi Arabia and the UAE, the region’s largest two markets account for around 74% of the region’s mobile phone shipments. Both posted respectable quarter on quarter growth of 3.6% and 1.3%, respectively.

“This was due to strong quarter-on-quarter (QoQ) growth in the smartphone segment, with shipments increasing 15.1% in Saudi Arabia and 10.8% in the UAE, spurred by the strong sell-in of vendors like Samsung and Huawei."

GCC smartphone market share for Q1 2019

GCC smartphone market share for Q1 2019

Samsung remains the market leader in the GCC smartphone space, with 32.6% unit share in the first quarter and QoQ shipment growth of 26.2%, stemming from the release of its new S-series models and its well-received A-series devices. 

Huawei continued its steep rise, recording QoQ shipment growth of 16.5% to account for a 25.9% share of the market’s smartphone shipments.  Apple maintained its third position, recording QoQ unit growth of 1.2%; however, its unit share declined from 21.5% in Q4 2018 to 19.7% in Q1 2019. Meanwhile, Honor sits at number four with 7.7% unit share for the quarter.

Nabila Popal, a senior research manager at IDC, said that Huawei’s strong performance maintains its reign at number two in the GCC smartphone market, mirroring its global ranking of smartphone vendors.

"The Chinese giant’s growth can be attributed to its well-balanced portfolio of models across key price bands and a strong promotional push. While still comparatively small in volume, Honor is another vendor that is growing rapidly in the GCC region, with well-priced offerings in the mid-range segment and strong growth that is currently focused in the Saudi market," she said.

Some of the smaller GCC markets also had mostly positive results in the smartphone segment (although this may be attributed to orders placed earlier in Q4 2018), with Qatar and Oman experiencing respective QoQ increases of 7.9% and 2.0% in smartphone shipments for Q1 2019.

However, due to poor Hala February sales, Bahrain and Kuwait saw smartphone shipments for the quarter declined 1.1% and 0.2% QoQ, respectively.

"While IDC does not expect to see any major growth in the GCC mobile phone market in 2019, the performance in first quarter suggests we are now past rock bottom," said Popal.

"IDC expects overall mobile phone shipments to grow 0.1% year on year in 2019 and 4.9% in 2020, with smartphone shipments increasing 2.6% over the same period in 2019 and 5.3% in 2020.