GCC mobile phone shipments slump to six-year low

Mobile phone shipments to the Gulf region fall 9.4% in 2018 to total 23.6 million units, the lowest since 2013
GCC mobile phone shipments slump to six-year low
New figures from International Data Corporation show that 2018 shipments were down 30 percent on the market's peak in 2015.
By Sam Bridge
Fri 22 Feb 2019 11:00 AM

Shipments of mobile phones to the countries of the Gulf Cooperation Council (GCC) fell 9.4 percent year on year in 2018 to total 23.6 million units, the lowest since 2013.

New figures from International Data Corporation (IDC) show that 2018 shipments were down 30 percent on the market's peak in 2015 when 33.9 million units were shipped.

The global technology research and consulting firm's Quarterly Mobile Phone Tracker revealed that 5.8 million mobile phones were shipped to the region in the fourth quarter of 2018, a decline of 2.2 percent on the previous quarter.

"The GCC's mobile phone market is undergoing a considerable challenge, with shipments shrinking significantly in 2018," said Kafil Merchant, a research analyst at IDC.

"This decline is being caused by a number of factors, including economic uncertainty, a lack of major innovation in new devices, continuous price increases, and lengthening refresh cycles. Since smartphone penetration is already very high in the region, these factors are combining to make consumers question whether it's worth upgrading their device. Many are concluding that there is simply no good reason to purchase the latest new smartphone on the market."

Saudi Arabia, the biggest market in the GCC with 54 percent share of the region's mobile phone shipments, declined 2.3 percent quarter on quarter and 8.2 percent year on year in Q4. 

"Growth continues to evade the Saudi market after the major double-digit declines that have characterized the last few years," said Nabila Popal, a senior research manager at IDC.

"However, with such drastic declines now a thing of the past, it seems the market may finally be on the road to recovery. The most significant change in the Saudi smartphone landscape in Q4 2018 was the growth of Chinese brands Huawei and Honor, while the top two brands historically, Samsung and Apple, both declined."

Quarter on quarter, overall mobile phone shipments were also down 2.4 percent in the UAE, 5.4 percent in Oman, and 8.6 percent in Kuwait, while Bahrain and Qatar enjoyed respective quarterly growth of 2.1 percent and 7.6 percent in Q4.

Samsung and Apple retained the top two spots with 32.3 percent and 23.7 percent respective shares of the GCC market in 2018. However, Samsung's share was down 4 percent year on year, while Huawei's share increased by 8 points over the same period.

"Huawei's growth in the region, at such a time when leading brands are declining, is to be commended," said Popal. "There is a tendency to attribute this growth purely to good features, low prices, and great marketing, but Huawei's success in the GCC has also been influenced by its focus on providing dedicated and customized channel support. By doing this, Huawei is able to respond quickly to local market conditions and consumer preferences, while directly helping its channel partners clear slow-moving stock."

Looking ahead, IDC said it does not expect to see any major recovery in 2019.

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