The International Data Corporation has recently announced that the Middle East mobile phone market suffered its first quarter-on-quarter decline on the third quarter of 2016. The latest figures show that shipments in the region totalled 23.8 million units, which is 0.7 percent less than the second quarter of 2016, and 19.4 percent down from the same period last year.
Every country in the GCC recorded declines in the third quarter of 2016, with Saudi Arabia suffering the biggest dip at an 18.3 percent decrease.
"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," says 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% 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."
In the UAE, mobile shipments declined 10 percent in the third quarter of 2016, while remaining GCC countries (Qatar, Bahrain, Kuwait, Oman) fell a combined 4.1 percent over the same period.
Samsung led the Middle East smartphone market with a 35 percent share, despite problems with its Galaxy Note 7. Samsung shipments were down just 3 percent quarter on quarter. Huawei were in second place with a 14.4 percent share, and Apple were in third place with an 11 percent share. A shortage of the supply of iPhone 7’s and a reduced supply of Apple’s older models is said to be behind the low percentage.
"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," says 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."
Photo credit: Yisris