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Tue 26 Nov 2019 12:46 PM

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Huawei smartphones slip in GCC popularity as US woes weigh

Huawei's demand has taken a hit due to problems in the US coupled with success of Samsung's A series

Huawei smartphones slip in GCC popularity as US woes weigh

Samsung continues to be the most popular smartphone in the GCC, followed by Apple in second and Huawei in third. 

Courtesy: Samsung

Chinese tech giant Huawei dropped down from its number-two position in the Gulf Cooperation Council (GCC) smartphone market for the first time in a year, according to the latest figures from global technology and consulting services firm International Data Corporation (IDC).

Samsung continues to be the most popular smartphone in the GCC, followed by Apple in second and Huawei in third. 

IDC's Worldwide Mobile Phone Tracker shows that the overall GCC smartphone market experienced solid year-on-year (YoY) unit growth of 20.2 percent in Q3 2019, with shipments totalling 4.84 million devices worth $1.62 billion.

From that, Samsung secured a 45.7 percent share, followed by Apple at 18 percent, while Huawei slipped down to number three in the region with 17 percent – it had been sitting at 25.7 percent in Q1 and was tipped to seriously challenge Samsung’s top spot.

"Unfortunately for Huawei, the dynamic smartphone market had other plans," said Nabila Popal, senior research manager at IDC. "Its phenomenal growth trajectory took a turn for the worse in Q2 2019, when its share dropped to 21.2 percent due to its well-documented problems in the US and the huge success of Samsung's A series across the region.

"As a result, Samsung's share, which had slumped to a low of 29.2 percent in Q4 2018 as Huawei's march gathered pace, is now back above the 45 percent mark."

Smartphone growth

With the exception of Bahrain, each of the GCC country markets experienced QoQ growth in Q3 2019, with the largest increases seen in the UAE (4.4 percent), Oman (3.4 percent), and Saudi Arabia (1.9 percent).

"The UAE posted strong quarterly and annual growth, spurred by the timing of new releases from several leading vendors (e.g., Apple, Samsung, Xiaomi) across various different price segments," said Akash Balachandran, senior research analyst at IDC.

"After several quarters of declines, the Kuwait market remained flat, signalling the arrival of some much-needed stabilisation, while Oman continues to be affected by a decline in pass-through business to its neighbours and a declining expat population. This latter issue, together with challenges around VAT and utility taxes, saw Bahrain post declines in Q3 2019."

Price band

As well as a shifting vendor landscape, the GCC smartphone market is also changing from a price band perspective, with the $100-$200 segment being the only one that is growing.

In Q3 2018, 26.2 percent of GCC smartphone shipments were priced above $600, but that share fell to 20.4 percent in Q3 2019. The share of devices priced between $200 and $400 dropped from 27.7 percent to 22.4 percent, while even handsets priced below $100 saw a drop from 16.8 percent to 11.8 percent.

These declines were absorbed by the $100-$200 price band, which saw its share rocket from 29.2 percent to 45.4 percent over the same period.

"Given the current macroeconomic situation and the subsequent drop in consumer spending in the GCC, this shift comes as no surprise," said Popal. "The $100-$200 segment is the clear hero here as it is able to offer phones at lower prices without sacrificing on high-quality specs such as large screens and high-resolution cameras.

“Even looking at individual brands, this is the price band that is dominating across almost all vendors – accounting for 64 percent of Samsung's shipments, 46 percent of Huawei's, 56 percent of Honor's, for example.

“It's clear that many vendors are increasingly focusing on this price segment to account for the shift in consumer spending habits."

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