26 Nov 2018
Dubai – IDC's latest Quarterly Mobile Phone Tracker for Q3 2018 shows that shipments of smartphones to the countries of the Gulf Cooperation Council (GCC) increased for the first time since Q1 2017. While the smartphone market's growth to 4 million units in Q3 2018 represents a modest 1.1% increase quarter on quarter (QoQ), it is a significant sign of stabilization for a market that has suffered five consecutive quarters of declines.
Feature phones continued to grow from strength to strength in Q3 2018, with shipments to the GCC increasing 6.7% QoQ to reach 1.9 million units. This meant the overall GCC mobile phone market saw a combined total of 5.9 million units shipped in Q3 2018, up 2.9% on the previous quarter, with Saudi Arabia, Qatar, and Kuwait responsible for driving the market's growth.
Saudi Arabia was the region's top-performing market in Q3 2018, with overall mobile phone shipments increasing 8.4% QoQ. "It seems the negative effects of Saudization and dependent taxes on the Kingdom's mobile phone space are losing momentum and the market is beginning to settle down again," says Kafil Merchant, a research analyst at IDC. "Additionally, new regulations requiring phones to carry IECEE certification have helped boost official shipments at the expense of gray market imports, while restrictions on the Kingdom's 2G network have seen an influx of cheaper 3G and 4G smartphones to fill the gap."
Despite facing import sanctions, Qatar's mobile phone market recorded its first quarter of growth for a year, with overall shipments increasing 8.0% QoQ in Q3 2018. Feature phones were the prime drivers of this growth, with shipments increasing 30.3%, while smartphone shipments were up 3.1% over the same period. Kuwait's overall mobile phone market saw growth of 2.6% in Q3 2018.
The rest of the region was characterized by declines in Q3 2018, with overall mobile phone shipments for the quarter down 4.2% in Bahrain, 4.3% in Oman, and 7.3% in the UAE. "The UAE mobile phone market is being hampered by an overall lack of disposable income and job security in the country, with the effects being felt across almost every sector," says Nabila Popal, a senior research manager at IDC. "Even events like GITEX Shopper that traditionally help boost electronics sales failed to have a significant impact."
In terms of the smartphone vendor landscape, Samsung maintained its lead in Q3 2018 with 31.2% share of the GCC market, despite suffering a 3.0% QoQ decline in shipments. Apple and Huawei followed with respective shares of 25.0% and 18.7%. "While many of the leading brands are taking a hit in unit terms, this is largely a strategic move as they are now focusing more on increasing their profitability and the race for volume share is over," says Popal. "As such, vendors are pushing models that are going to add to their bottom lines, which has led to growth in the mid to high segment and an increase in the average selling prices of new flagship devices."
Looking at 2018 as a whole, IDC expects the overall GCC mobile market to see a single-digit decline year on year, with growth returning again in 2019.
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