06 Oct 2022
GCC Mobile Phone Market Impacted by Slowdown in Demand
Dubai – Newly released data from IDC's Worldwide Quarterly Mobile Phone Tracker shows that shipments of mobile phones to the Gulf Cooperation Council (GCC) region declined 8.9% quarter on quarter (QoQ) in Q2 2022 to total 5.56 million units. Smartphone shipments were down 8.0% QoQ to 5.03 million units, while feature phone shipments declined 16.9% over the same period to 0.53 million units. In terms of value, the GCC smartphone market was worth $1.83 billion in Q2 2022, a decrease of 11.6% QoQ, while the feature phone market totaled $10.15 million, down 9.1%.
"The channels reported that consumer demand is slowing, and household spending is increasingly being directed toward essentials in the major markets of Saudi Arabia and the UAE, a trend that vendors are trying to counter with price promotions," says Akash Balachandran, a research manager at IDC. "Supply shortages eased in the low-end segment of the market ($100<$200), with shipments of these devices improving in Q2 2022. However, this relative improvement on the supply side was not enough to prevent quarterly declines across all the other price bands."
Saudi Arabia accounted for 51.6% of all smartphones shipped across the GCC in Q2 2022, although shipments to the Kingdom were down 10.8% QoQ in unit terms. The UAE, which is the GCC's second-largest market, accounted for 24.0% of the region's overall smartphone market, with shipments to the country declining 11.4% QoQ. "The Saudi smartphone market endured the twin challenges of increasing re-exports and lower consumer demand in Q2 2022," says Balachandran. "Meanwhile, in the UAE, channels reported that fluctuating prices were a major challenge in Q2 2022, leading to the quarterly decline that was seen in the country's smartphone market."
Samsung led the GCC smartphone market in unit terms in Q2 2022 with 48.4% share, despite seeing its shipments to the region decline 6.3% QoQ. Second-placed Apple, with 16.0% share, saw shipments decline 4.4% QoQ, with consumers awaiting the release of the iPhone 14 series of devices in Q3 2022. Rounding out the top three, Xiaomi accounted for 15.2% of the GCC smartphone market in Q2 2022 but suffered a 6.2% QoQ decline in shipments as it shifted its focus to midrange and high-end devices.
The GCC smartphone market is forecast to grow 6.6% QoQ in Q3 2022. Regional events like the FIFA World Cup 2022 in Qatar will help drive retail footfall in the region, while the release of new Apple devices will help drive overall value growth.
"5G penetration is set to continue to grow as the technology is expanding into lower price bands," says Ramazan Yavuz, a senior research manager at IDC. “5G devices accounted for 33.5% of smartphone shipments in Q2 2022 and the technology is expected to become standard in mid-tier price bands among Android vendors. By the final quarter of 2026, we expect that 5G devices will account for 82.7% of total GCC smartphone shipments."
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