IDC reveals UAE slump in smartphone sales

Nevertheless, mobile phone makers are still targeting the region, with opportunities for growth in the mid-market and value offerings.

Above, Tecno’s Phantom 6 Plus smartphone during the global unveiling event in Dubai. Reem Mohammed / The National
Powered by automated translation

The once-booming market for mobile handsets in the UAE and wider Mena region has fallen dramatically in the first half of the year, according to tech research company IDC.

The UAE experienced a 15.1 per cent fall in its mobile phone shipments in the second quarter of 2016 when compared with the previous three months and Saudi Arabia recorded a 22.3 per cent fall. Shipments to the Middle East fell 8 per cent quarter-on-quarter in Q2 2016, the second successive quarter of decline for the region.

“Low oil prices, reduced government spending, and ongoing political instability continue to hamper demand in the region,” says Nabila Popal, research manager for mobile phones at IDC Middle East, Africa and Turkey. “Furthermore, consumers now expect much more from new devices before opting for an upgrade, a factor that has significantly lengthened the mobile refresh cycle and led to flagging spending in the consumer segment. Even the relative success of the Samsung S7 Edge could not halt the slump in the overall industry.”

__________

Smartphone launch

Tecno Mobile goes global with Phantom 6 launch in Dubai – in pictures

__________

Nevertheless, mobile phone makers are still targeting the region, with opportunities for growth in the mid-market and value offerings. Chinese manufacturer Tecno Mobile launched its flagship Phantom 6 and Phantom 6 Plus smartphones with fanfare at Burj Khalifa, looking to break into the region. Priced at Dh899 and Dh1,099, it was a high- end opening for a mid-market phone.

Its business plan has focused on emerging markets, selling 59 million units in Africa in 2015 and tailoring its products to the local market. But how does a mobile phone maker differentiate itself and drive profits in an already cluttered marketplace?

“We are now selling through Souq.com, but we will have an ‘experience’ store opening in Dubai in Q1 2017, so customers can look, feel and enjoy the phones,” said Arif Chowdhury, vice-president of Transsion Holdings, the parent company of Tecno Mobile. “Customers have to be able to see what we offer and how we differ from the competition. We expect to have a double-digit share of the market after a year and we will grow organically as we tailor our phones to the local taste.”

While mobile phone shipments may have slowed to the UAE they are still the No 1 product sold on Souq.com. It lists over 300 models on its site, with more than 45 million visitors every month.

“Overall, the UAE market still remains challenging for new brands because of brand-conscious customers,” said Shonam Khaitan, regional director at Souq.com. “We also have lower prices of tier 1 brands compared to their global pricing and there is already high smartphone penetration. Compared to high barriers of entry in offline ecosystem, Souq.com has low barriers to entry and if the brand is able to hit the right product and pricing, along with some marketing exposure, they definitely see good tractions on the platform.”

ascott@thenational.ae

Follow The National's Business section on Twitter