GCC mobile shipments decline in Q2 amid Dubai slump – IDC

Gulf Cooperation Council mobile phone shipments continued their decline in the second quarter led by poor market conditions in the UAE, according to International Data Corporation (IDC).

The consultancy said overall shipments were down 9.9 per cent year-on-year and 2.1 per cent quarter-on-quarter to 5.8 million units.

This came as the smartphone segment saw its fifth consecutive quarter of declines with shipments down 14.3 per cent YoY and 3.4 per cent QoQ.

Read: VAT, poor job security hit Gulf mobile phone market in Q1

Shipments of feature phones increased slightly by 1.4 per cent YoY and 0.9 per cent QoQ as brands capitalised on increasing demand for cheaper devices.

The UAE market saw the worst performance with smartphone shipments down 10.9 per cent QoQ and the overall market declining 8.8 per cent.

“The UAE market continues to struggle, with speculation rife that Dubai is experiencing a secret recession that no one is openly talking about,” said IDC research manager Nabila Popal.

“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.”

Elsewhere, overall mobile shipments were down 2.8 per cent in Qatar, 5.4 per cent in Bahrain, 5.6 per cent in Oman and 0.5 per cent in Kuwait QoQ, with Saudi Arabia the only bright spot.

Smartphone shipments to the kingdom increased for the first time in a year over the last three months to 0.9 per cent compared to the opening quarter of the year and were up 1.7 per cent on Q2 2017.

IDC said this was largely thanks to a new import policy that requires all phones to carry IECEE certification.

“A consequence of this policy is that there has been a significant reduction in gray shipments to the kingdom, with a subsequent increase in official shipments to meet demand,” said IDC research analyst Kafil Merchant.

“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.”

Government data showed 234,000 foreign workers left the kingdom in the first quarter.

Read: Saudi unemployment rises in Q1, 234,000 foreign workers leave jobs

Samsung was the top smartphone vendor during Q2 with 34.2 per cent market share compared to Apple’s 24.3 per cent and Huawei’s 16.5 per cent, with the latter’s recent devices featuring artificial intelligence chipsets proving popular, IDC said.

The company predicted a “very tough” year for the industry ahead with overall mobile shipments forecast to decline 12.9 per cent compared to 2017.