Mobile phone shipments stutter in region

ALKESH SHARMA / Emirates Business

Weakening consumer sentiments and dwindling markets have started taking a toll on various trades in the Middle East region. The mobile phone industry is also experiencing much of the heat, with a recent survey report citing that shipments of phones have declined by over 10 percent during the first quarter of 2016, compared with the same period last year.
Industry pundits say consumers have started taking cautious steps when it comes to spending money on a new mobile phone. Startled by frequently fluctuating business ecosystem, majority of the consumers have either postponed or cancelled their plans to upgrade their current mobile phone.
According to the latest figures released by International Data Corporation (IDC), shipments of mobile phones plunged by nearly 11.7 percent quarter-on-quarter in the Middle East region in the first quarter of 2016.
“Once a technology that seemed to be in a perpetual boom, mobile phones are no longer immune to weakening consumer sentiment as the gloomy macroeconomic outlook begins to bite,” says Nabila Popal, research manager for mobile phones at IDC Middle East, Africa, and Turkey.
The report says that the market totalled around 26.1 million units
for the first three months of the
year, a significant drop from the
29.49 million units shipped in the
previous quarter.
“The market’s decline is being spearheaded by the one-time stalwarts of Turkey, the UAE, and Saudi Arabia, with shipments in these countries down 13.2 percent, 12.7 percent, and 10.4 percent, respectively, during this year’s first quarter when compared with the previous quarter. The rest of the Gulf Cooperation Council (GCC) countries also saw dips, with the exception of Qatar; although even then, the growth was a very modest 1.3 percent,” said Popal.
The performance was even worse from a year-on-year perspective, with shipments down 12.5 percent from the 29.78 million units registered in the first quarter of 2015.
Akshay Makhani, a technology researcher with a Dubai-based consultancy firm, told Emirates Business, “We have observed that consumers are shying away from spending on expensive handsets. Its natural as market is not at all oozing out any confidence. Earlier handsets, priced in the range of AED1000 to AED2000, were easily finding buyers but now consumers are preferring handsets that are priced below AED600. This plummeting trend is expected to prevail during the rest of the year.”
Notably, IDC expects the Middle East mobile phone market to continue to stutter throughout 2016, with a slight recovery possible by the end of the year due to the holiday season and a number of major launches that are slated for last quarter of 2016.