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International Data Corporation (IDC), the premier global provider of market intelligence, has released new research that reveals that shipments of 4G LTE handsets to countries in the Gulf Cooperation Council (GCC) have increased by a staggering 400%. Increasing by more than four times over the last year.
The research was conducted by IDC’s Europe, Middle East and Africa Quarterly Mobile Phone Tracker, which provides a unique insight into the forces shaping the handset and smartphone markets in Western Europe, Central and Eastern Europe, and the Middle East and Africa.
IDC’s market intelligence firms 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.
Simon Baker, programme manager for IDC’s handset research in Central Europe, Middle East and Africa, says that “The GCC is less than a year behind the market development already seen in Western Europe. However, the market is further behind the US, where 4G already makes up three-quarters of the smartphone market.”
What has contributed to the rapid growth, notes Nabila Popal, research manager of IDC’s handset research in Middle East, Africa, and Turkey, is the competitive market. “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.”
Popal added that “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, according to the IDC, the overall smartphone market is rapidly expanding, with growth rates picking up over the last two quarters. 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.”
Making an impact in the market are also companies that focus only on distribution and marketing and source most of their phones from independent manufactures in China. IDC’s Popal says that this model is working well.
“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.”
Examples of these in Africa includes Tecno in Nigeria and Kenya. Tecno’s shipments were up 269% year on year in Q3 2014. In Pakistan, it is Q-mobile, 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.”