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GCC mobile shipments decline 9.9pc

Bahrain Business
Fri, 07 Sep 2018
By Avinash Saxena

MANAMA: The UAE is experiencing a secret recession that no-one is openly talking about, according to a top official from the International Data Corporation (IDC), a technology research and consulting firm.

In a report tracking mobile phone shipments in the GCC, senior research manager Nabila Popal said: “The UAE market continues to struggle, with speculation rife that Dubai is experiencing a secret recession that no-one is openly talking about.”

“This is not only true in the mobile space but across large swathes of the UAE retail sector. Indeed, traditional shops in the heart of old Dubai that used to be the centre of trade and commerce are shutting down faster than the temperature is rising,” she added.

According to the latest figures announced by IDC, the GCC mobile phone market experienced a decline in shipments in the second quarter this year.

The IDC Quarterly Mobile Phone Tracker shows overall shipments to the region fell 9.9 per cent year-on-year (YoY) and 2.1pc quarter-on-quarter (QoQ) to total 5.8 million units.

The market’s poor performance stemmed from a fifth consecutive quarter of decline for the smartphone segment, with shipments of these devices down 3.4pc QoQ and 14.3pc YoY.

Meanwhile, shipments of feature phones saw mild growth of 0.9pc QoQ and 1.4pc YoY.

Many new brands are also focusing on the feature phone space as these devices are reliable volume movers.

This attention, combined with existing high demand for these cheap devices, is helping to spur the feature phone segment.

In the UAE, smartphone shipments were down 10.9pc QoQ in Q2 2018, with the country’s overall mobile market declining 8.8pc.

Smartphone shipments to Saudi Arabia were up in Q2 2018, for the first time in four quarters, with QoQ growth of 0.9pc. Overall mobile shipments to the country were up 1.7pc over the same period.

“This growth primarily stems from the implementation of a new import policy that requires all phones to carry IECEE certification,” said Kafil Merchant, a research analyst at IDC.

“A consequence of this policy is that there has been a significant reduction in gray shipments to the country, with a subsequent increase in official shipments to meet demand. However, with the introduction of a dependent tax causing millions of expats to make plans to leave the country, vendors targeting the Saudi market will continue to face a significant challenge.”

In Bahrain, overall mobile shipments were down 5.4pc QoQ.

In terms of the smartphone vendor landscape, Samsung maintained its lead in Q2 2018 with 34.2pc share. Apple and Huawei followed with respective shares of 24.3pc and 16.5pc.

“Huawei’s new product launches have seen it garner significant popularity in the market as users are excited by the vendor’s integration of innovative technologies like artificial intelligence (AI) into its smartphones,” said Ms Popal.

“It is important to note that there is currently still more buzz than substance around AI, but once its use becomes more integrated in consumers’ lives, being able to offer such a feature will be a true advantage for any smartphone vendor.”

Looking ahead, IDC expects 2018 to be a very tough year for the industry, with overall mobile phone shipments to the GCC forecast to decline 12.9pc YoY for the year as a whole.

Given the prevailing market challenges, it will take some time for the market to adjust and for consumer behaviour to stabilise.