Shipments of sub $200 models drive Mideast smartphone market by 21% in Q3

• Samsung’s extensive distribution network and Apple’s full-stack device services and ecosystem strategy solidify their dominance in the region.
• Retailers keen to broaden their product portfolios, reduce dependence on incumbent brands and aim to entice additional investment through in-store branding and improved profit margins.
• Businesses note an increase in both their consumer bases and job opportunities despite falling oil prices.

Shipments of sub $200 models, fueled by Transsion, Xiaomi and Honor, helped defy global downturn with a 21 per cent year-on-year surge in smartphone shipments in the Middle East  to 12 million units in the third quarter of 2023.

Among the countries, Iraq continued its strong momentum with 57 per cent growth, followed by Saudi Arabia with 46 per cent and UAE with two per cent growth while Kuwait and Qatar saw shipment drops of four per cent and two per cent respectively.

Manish Pravinkumar, Senior Consultant at Canalys, said that Transsion is steadily increasing its footprint in response to the expanding mass-market segment amid broader economic uncertainties.

Infinix introduced exclusive models with Noon in Saudi Arabia, Tecno promoted its Camon 20 with enhanced incentives in Iraq while Xiaomi and Honor strive to penetrate the premium market with enticing incentives and aggressive promotions, luring customers away from established brands demands persistent investment.

Meanwhile, Pravinkumar said that Motorola is growing its consumer and enterprise businesses significantly, particularly in the GCC region.

High resale value

Motorola’s strategic partnership with Logicom distribution aims to provide enterprise-ready solutions with the cutting-edge ThinkPhone.

On the other hand, Samsung and Apple maintained their market positions. Samsung’s extensive distribution network and Apple’s full-stack device services and ecosystem strategy solidified their dominance in the region.

“The demand for used Apple and Samsung devices remains high, viewed as lucrative investments due to high resale value. Retailers are keen to broaden their product portfolios, reducing dependence on incumbent brands. They aim to entice additional investment through in-store branding and improved profit margins,” he said.

However, he said that emerging brands have taken the initiative and are launching flagship devices in the region.

Oil price challenges

“Oppo and Honor are venturing into the foldable segment to compete with established incumbents such as Samsung. But consumers in markets such as Qatar, Kuwait and Saudi Arabia will still hesitate to switch brands. Affordability, aspirational value and availability will be pivotal factors for emerging players, with schemes such as Buy Now Pay Later gaining traction through platforms such as Tabby and Tamara, proving beneficial for both retailers and consumers,” he said.

Despite oil price challenges caused by the current geopolitical situation, Sanyam Chaurasia, Senior Analyst at Canalys, said the GCC region’s non-oil sectors are poised to bolster the consumer market.

“The GCC’s non-oil economy is thriving due to digital transformation in sectors such as retail, manufacturing, healthcare and entertainment. The retail industry in the UAE and Saudi Arabia is set for significant growth in the next five years. But vendors must recognize that retail space in the region will be expensive.”

To ensure a stronger presence in the market, he said that they [vendors] should form robust partnerships with local entities in the early stages.

“Developing local expertise in on-site teams is vital, rather than relocating staff from elsewhere. While physical stores remain central, online retail and B2B marketplaces are gaining traction, driven by trends such as the emergence of Gen Z consumers, increasing wealth in the GCC and higher female workforce participation.”