According to the latest figures by IDC, the GCC mobile phone market ended the years on a positive note after suffering three consecutive quarter-on-quarter (Q-o-Q) declines from Q1 2016 to Q3 2016.
The technology research and analyst firm’s Quarterly Mobile Phone Tracker showed that the region saw the shipment of 5.98 million units in Q4 2016, up 7.7 percent on the previous quarter.
When viewed year on year, however, the shipment numbers for Q4 2016 do not make good reading, translating into a downturn of -30.5 percent on the corresponding quarter of 2015, said the report.
In 2016, the region’s mobile phone market experienced a sharp slowdown with total shipments down nearly -25 percent on the year before.
“While the rate of Q-o-Q growth varied from country to country in Q4 2016, Qatar was the only member of the GCC to post a decline (-2.2 percent),” said Isaac T. Ngatia, Senior Research Analyst, IDC Middle East and Africa. “Saudi Arabia, which had suffered the worst declines in previous quarters, saw a reversal of fortunes in Q4 2016 by posting the region’s highest Q-o-Q increase at 11.9 percent. The market is beginning to stabilise following the Saudization of the mobile industry and the challenging macroeconomic climate that compounded the effects of its introduction.”
According to Ngatia, the UAE, which is the GCC’s second-largest market, also saw a considerable improvement in Q4 2016, with shipments up by about five percent Q-o-Q for the final three months of 2016.
“Q4 is traditionally the best-performing quarter of the year due to spending splurges in line with customary end-of-year and New Year festivities. As such, only time will tell whether temporary seasonal factors were the main drivers of the market’s turnaround in Q4 2016,” he said.
IDC’s research shows that Samsung continued to lead the GCC smartphone market in Q42016, with almost 35 percent share. However, its shipments were down slightly (-0.3 percent) Q-o-Q, this does not include the recall of Galaxy Note 7 shipments, which are not recorded in IDC’s report.
Meanwhile, Apple was the market’s biggest gainer in Q4 2016, recording Q-o-Q growth of 20 percent to secure 23 percent share of the GCC smartphone market.
When viewing 2016 as a whole, the overall GCC smartphone market shrank 23 percent year on year (Y-o-Y) in unit terms, with the leading vendors Samsung and Apple experiencing declines of 32 percent and 21 percent, respectively.
Only Huawei bucked the trend to record a nine percent Y-o-Y increase in its shipments. The introduction of competitive flagship devices, the positioning of models across a variety of price categories, and strong investments in marketing initiatives were among the drivers of Huawei’s impressive growth in what was an extremely tough year for its competitors.
Despite the positive Q-o-Q figures for Q4 2016, channels and retailers are still struggling to keep up with the ever-changing mobile landscape. Consolidation will likely continue at both the market and vendor level, making brand development and engagement key to penetrating the market. The lesser-known or smaller brands may find it more difficult to penetrate an already saturated market. All in all, IDC expects the GCC mobile market to see only modest Y-o-Y growth of three percent in 2017, as the market begins its long recovery from the -25 percent decline seen in 2016.
