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Sat 26 Dec 2015 03:15 PM

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Kuwait mobile phone market set to shrink 6% in 2016

Forecast by International Data Corporation says Kuwaitis are opting for cheaper handsets amid slowdown

Kuwait mobile phone market set to shrink 6% in 2016
(Getty Images)

The Kuwaiti mobile handset market is tipped to shrink by 6 percent year on year in 2016, according to the latest forecasts from International Data Corporation (IDC).

The global technology research and consulting services firm said it expects the market to follow up respective year-on-year declines of 19 percent and 22 percent in the second and third quarters of this year with a downturn of 17 percent for 2015 as a whole.

"In line with global trends, the market has seen a consolidation of brands, with the likes of BlackBerry dropping off the radar completely," said Isaac T Ngatia, a mobile handsets analyst at IDC Middle East, Africa, and Turkey.

"It is also clear that Kuwait is a brand-centric market where consumers tend to stick with their preferred brands. Various macro factors are also hampering growth, including the expected flattening of the market in general due to declining consumer demand and slowing population growth (mainly of expats).

"The oil and gas sector in Kuwait accounts for about 95 percent of export revenues and about 60 percent of the country's GDP, meaning falling oil prices are having a negative ripple effect on demand for goods and services within the wider economy." 

Over the past few years, Kuwait has witnessed high growth in the penetration of mobile phones, registering one of the fastest growth rates in the world in terms of handset shipments, with IDC data showing that mobile phone shipments to Kuwait increased 159 percent between 2012 and 2014. 

Ngatia said this was mainly driven by the strong uptake of smartphones, which saw growth of 272 percent over the same two-year period, primarily courtesy of Samsung and Apple.

According IDC, devices below the $150 price point are seeing higher growth rates than those priced above that level.

The growth in cheaper devices is being spurred by a combination of factors such as new brands launching low-end phones in this price segment. These include VSun, Xtouch, and Obi, among others.

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