By Staff writer
Shipments in the region totalled 23.8 million units, down 19% on Q3 2015 as Saudisation move has major impact
The Middle East mobile phone market suffered its third consecutive quarter-on-quarter decline between July and September, according to the latest figures announced by IDC.
Shipments in the region totalled 23.8 million units, down 0.7 percent on the 23.9 million units shipped in Q2 and 19.4 percent on the corresponding period last year.
IDC said that given that the quarter-on-quarter decline in Q2 was much steeper at 8.5 percent, the silver lining of these latest figures is that the rate of decline seems to be flattening out.
Every country in the GCC recorded quarter-on-quarter declines in Q3, with Saudi Arabia suffering the biggest dip at 18.3 percent.
"The effects of the challenging macroeconomic climate are being compounded by the impact of Saudization on the mobile market, which is now in full effect," said Saad Elkhadem, a research analyst at IDC MEA. "The law stipulates that only Saudis can now be employed within the mobile phone industry – covering sales, after-sales maintenance, and accessories.
"The kingdom's mobile market is predominantly driven by independent retailers, and the new law has taken a drastic toll on this space, with almost 50 percent of stores shutting down.
"The impact of these closures has been huge so far with an immediate drop in shipments; however the expectation is that the channel will shift slowly and steadily towards organized retail as the market seeks to correct itself."
The UAE's mobile shipments declined 10 percent quarter on quarter in Q3, while the remaining GCC countries (Qatar, Bahrain, Kuwait, Oman) fell a combined 4.1 percent over the same period.
"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," said Nabila Popal, research manager for mobile phones at IDC MEA.
Despite the woes Samsung faced with the need to recall all its Galaxy Note 7 phones, the vendor continued to lead the Middle East smartphone market with almost 35 percent share.
"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," said Simon Baker, senior program manager for mobile phones at IDC CEMA. "A new middle tier is emerging in the region's smartphone market and the old polarization 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 said that Q4 is traditionally the best quarter of the year for mobile shipments in the region, adding that it expects the market to see growth of 8 percent quarter on quarter and 8.1 percent year on year in Q4.
The kingdom's mobile market is predominantly driven by independent retailers, and the new law has taken a drastic toll on this space, with almost 50 percent of stores shutting down.
plus not many people can afford to buy the latest mobile every few months!