GCC Mobile Phone Market Remains Sluggish As Consumers Stay Cautious

The overall mobile phone market of the Gulf Cooperation Council (GCC) region experienced a very slight quarter-on-quarter (QoQ) decline of 0.2% in Q3 2020 to total 4.97 million units in Q3 2020, according to newly released research from International Data Corporation (IDC).

The firm's latest Quarterly Global Mobile Phone Tracker reveals that smartphone shipments declined 0.9% to 4.16 million units, while feature phone shipments increased 4.1% to total 0.8 million units. In terms of value, the smartphone market totaled $1.16 billion in Q3 2020, an 11.6% QoQ decline. However, the feature phone market's value grew 1.9% QoQ to reach $15.8 million.

Despite most countries easing lockdown measures in Q3 2020, the channels chose to take a cautious view, as consumer demand remained modest throughout the quarter. Consumers continued to prioritize spending on essentials while cutting back on discretionary spending in various categories, including mobile phones.

Saudi Arabia accounted for 52.6% of all smartphones shipped within the GCC region in Q3 2020. However, the Kingdom suffered an overall QoQ decline in shipments due to the tripling of VAT, which led to an increase in prices. The UAE, the region's second-largest market, saw its share of smartphone shipments increase to 24.1%. Meanwhile, Samsung extended its lead of the GCC smartphone market in Q3 2020, accounting for 44.6% unit share. In terms of value, it ranked second with 30.8%.

"With its large portfolio of models in the entry-level and mid-range price bands, Samsung not only maintained its leading position but also captured share lost by Huawei," says Akash Balachandran, a senior research analyst at IDC. "The demand for low-end smartphones continues to remain strong as customers look for value and the channel remains cautious when it comes to stocking premium and ultra-premium devices."

Although Apple continued to lead the smartphone market in terms of value, with 46.3% share, it posted a decline in units with shipments of its iPhone 12 series being delayed well into Q4. In terms of shipments, Apple recorded a unit share of 15.2% for Q3 2020. Xiaomi continues to perform well and posted 11.9% unit and 6.7% value shares for the quarter, with an especially strong performance from its Redmi 9 line of devices. Huawei lost market share slightly as the tensions over its U.S. trade ban continue to hamper its performance.

Looking ahead, the GCC smartphone market is forecast to see QoQ unit growth of 6.5% in Q4 2020. "Q4 has traditionally been a strong quarter for the GCC smartphone market," says Ramazan Yavuz, a senior research manager at IDC. "Despite the ever-looming possibility of additional lockdowns and spikes in COVID-19 cases,  an improvement in the market's performance is expected toward the end of the year, particularly as countries begin to normalize travel and further positive news of a COVID-19 vaccine is released. Brands like Apple and Samsung will also post a strong performance in the upcoming quarters with newly released models in their portfolios. Chinese vendors, focused on driving penetration in the region, will continue their marketing investments, all of which will translate into a well-performing market in the short to mid-term."

For more information, please contact Sheila Manek at smanek@idc.com  or on +971 4 446 3154.