Because of 4G LTE Shipments MEA Smartphone Market Booms
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GCC shipments of 4G LTE handsets have increased more than four times over the last year and are now close to accounting for one half of all smartphones sold in the region, according to the latest figures from International Data Corporation (IDC). The market intelligence firm's Worldwide Mobile Phone Tracker shows that smartphones now make up 75% of the phones shipped in the GCC, with buyers increasingly moving toward 4G handsets as the market matures.
"The GCC is less than a year behind the market development already seen in Western Europe," says Simon Baker, program manager for IDC's handset research in Central Europe, Middle East, and Africa. "However, the market is further behind the U.S., where 4G already makes up three quarters of the smartphone market."
Competition and falling prices are playing their part in boosting the uptake of 4G LTE in the GCC. "All Apple handsets from the iPhone 5C and 5S now offer LTE, but there is much greater choice when it comes to 4G Android models," says Nabila Popal, research manager for IDC's handset research in Middle East, Africa, and Turkey. "Samsung is now the region's largest vendor of LTE-enabled devices, and while the average price that a Gulf consumer currently pays for a 4G handset is close to $600 and has not fallen much over the last 12 months, cheaper models are arriving, most notably from Lenovo and Huawei."
Elsewhere in the Middle East and Africa, the overall smartphone market is rapidly expanding, with growth rates picking up over the last two quarters. IDC research shows that in Africa as a whole and in the wider Middle East beyond the GCC and Turkey, the number of smartphones sold in Q3 2014 was up 300% year on year. "We are in the midst of a boom," says Isaac Ngatia, a research analyst at IDC Middle East, Africa, and Turkey. "The technology levels are more basic than those seen in the GCC and 4G phones remain relatively uncommon, but many consumers are now getting their hands on a smartphone for the first time."
"It is a very different kind of market from the Gulf," adds Baker. "Cheaper phones are the ones selling in high volumes, and prices are tumbling; the average price paid is not much more than half that in the GCC. The brand situation is different too; beyond Samsung and Chinese brands like Lenovo, Huawei, and ZTE that are making a push in the region, many of the bigger players just focus on single countries or sub-region and aren't well known beyond them."
There are also a number of brands in this market that typically focus only on distribution and marketing, and mainly source their phones from the production catalogues of independent manufacturers in China. "It is a different sort of brand from the international names the handset industry is usually associated with, and as a model it is working very well at the moment," says Popal. "These regional brands are able to offer Android phones sourced from China that have the larger screen sizes and functions of models from the big international names but at much lower prices."
Key examples include Tecno in Nigeria and Kenya, whose smartphone shipments were up 269% year on year in Q3 2014, and Q-mobile in Pakistan, which has more than half the national market and posted growth of healthy 42%. "Brands such as these will continue to perform well over the coming quarters," concludes Popal. "Smartphone shipments in these poorer countries will expand a lot further in the next couple of years, as they still account for less than half the total handset market."