- Covid deals major blow to GCC mobile phone demand in second quarter
- Overall shipments fall 10.3% to 4.9m devices.
- Smartphone shipments declined by 6.8% to 4.2m units while feature phones suffer 25.3% decline to 0.8m units.
- Market is expected to fall by 1% in third quarter.
Dubai: Mobile phone shipments into the Gulf Cooperation Council (GCC) declined by 10.3 per cent quarter on quarter to 4.9 million units due to Covid-19.
Research firm International Data Corporation (IDC), said that smartphone shipments declined by 6.8 per cent to 4.2 million units while feature phones declines by 25.3 per cent to 0.8 million units.
The value of smartphone shipments was down 16.8 per cent quarter on quarter to $1.3 billion while the feature phone market’s value plunged 24 per cent to $15.4 million.
“While supply shortages impacted the market’s performance in Q1 2020 and the early weeks of Q2 2020, a steep decline in consumer demand was the primary cause of the market’s decline,” says Akash Balachandran, a senior research analyst at IDC.
Moreover, he said that Covid-related lockdowns and measures resulted in physical retail closures for extended periods of time across the region, precipitating a major decline in demand.
Saudi Arabia accounted for 53.8 per cent of all smartphone units shipped within the GCC in the quarter. While there was a significant decline in demand across retail channels due to varying states of lockdown being implemented in Saudi Arabia, Balachandran said that shipments into the country were less affected.
“Indeed, the planned implementation of a VAT increase in Saudi Arabia from July 1st caused channels to import larger quantities of smartphones before the change took place.”
Samsung maintains its lead
Samsung continued to lead the GCC smartphone market in the quarter, with 39.5 per cent unit share and 25.9 per cent value share as it was able to retain value and extend its unit share due to the fact that it was relatively less impacted by supply shortages than other brands and cushioned by a shorter refresh cycle (particularly in the low to mid-range price bands).
Apple saw reduced demand and shipments as consumers and the channel alike took a cautious approach to purchasing expensive high-end devices. Despite this, Apple accounted for 18.5 per cent unit share and a 50.8 per cent majority share of its value.
Xiaomi continued to post unit and value growth following the introduction of its new line of Note models in the previous quarter, accounting for 9.9% unit share and 5.7 per cent value share.
Looking ahead, IDC expects the GCC smartphone market to decline a further one per cent quarter on quarter in the third quarter of this year.
“Across the GCC region, the potential for a second wave of Covid cases, the return of lockdowns, stagnating oil prices and economies, and weakened consumer and commercial spending will push any real recovery toward the end of the year,” Ramazan Yavuz, a senior research manager at IDC, said.
While pent-up demand from consumers caused an immediate surge in smartphone sales after lockdowns were relaxed, he said the second half of the year is expected to perform slightly weaker as the region’s economies are not showing signs of recovery and consumer demand is weakening after the initial pent-up demand is met.