GCC smartphone market suffers decline as demand continues to weaken

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 0.8 per cent quarter on quarter (QoQ) in Q1 2022 to total 6.10 million units.

Smartphone shipments were up 0.4 per cent QoQ to 5.47 million units, while feature phone shipments decline 9.8 per cent over the same period to 0.63 million units. In terms of value, the GCC smartphone market was worth $2.09bn in Q4 2021, a decrease of 4.5 per cent QoQ, while the feature phone market totaled $11.16m, down 25.9 per cent.

Samsung and Xiaomi channels reported improved supply across the GCC for the quarter. Samsung saw its most significant growth in the low ($100<$200) and premium ($800+) ends of the market, while Xiaomi saw growth in the midrange to high-end category ($200<$600).

Meanwhile, Apple faced shortages stemming from delayed shipments, which impeded the vendor’s overall unit and value growth during the quarter.

Furthermore, smartphone shipments to Saudi Arabia declined 4.9 per cent QoQ in Q1 2022, although the kingdom still accounted for 53.3 per cent of all smartphone shipments to the GCC. The UAE, the region’s second-largest market, saw shipments increase 11.2 per cent QoQ for 24.9 per cent share.

“Q1 2022 saw a drop in shipments to Saudi Arabia with partners reporting excess inventory in the channel and lagging demand,” said Akash Balachandran, senior analyst at IDC. “However, the ‘other GCC’ countries (Bahrain, Kuwait, Oman, and Qatar) saw a mild pickup after having experienced constrained supply in previous quarters. The UAE’s smartphone growth stemmed mainly from an improved supply of low-end and premium Samsung devices, as well as from Xiaomi’s concerted focus on promoting its midrange devices.”

Samsung led the GCC smartphone market in terms of shipments in Q1 2022 with 47.5 per cent share. The vendor posted 6.9 per cent QoQ growth in shipments as supply improved, especially for its S-series devices. Second-placed Apple, with 15.4 per cent share, saw shipments decline 18.2 per cent QoQ, with channel partners reporting supply constraints and delays in shipments. Rounding out the top three, Xiaomi accounted for 14.9 per cent of the GCC smartphone market in Q1 2022, with its expanding portfolio of midrange to high-end devices driving a 9.3 per cent QoQ increase in shipments to the region.

The GCC smartphone market is forecast to decline 4.8 per cent QoQ in Q2 2022 due to rising inflation, declining consumer demand, and growing inventory in the channel.

“5G shipments to the GCC in Q1 2022 were down 3.4 per cent QoQ and accounted for 35.9 per cent of overall smartphone shipments,” says Ramazan Yavuz, senior research manager at IDC. “This was due to higher shipments of entry-level 4G Android devices in conjunction with shortages of iOS 5G devices. While ups and downs are expected in the short term, 5G penetration is forecast to continue at its previous rapid pace over the medium and long term and will make up 80.6 per cent of total GCC smartphone shipments in 2026.”

Read: Global smartphone sales declined 6.8% in third quarter of 2021: Gartner