Dubai: Mobile phone shipments into the Gulf Cooperation Council states are expected to show a growth only in 2019 and 2020 after three years of decline.

The market witnessed a growth in 2015, followed by a fall of 22.5 per cent year on year in 2016 and 0.4 per cent decline in 2017 to 26.2 million units.

Kafil Merchant, research analyst at International Data Corporation Middle East, Africa and Turkey, told Gulf News that the GCC market is expected to show a decline of 4.3 per cent year on year in 2018.

The key markets of the UAE and Saudi Arabia are tipped to suffer year on year declines of 8.2 per cent and 5.7 per cent respectively. The GCC market is expected to see a growth of 2.8 per cent in 2019 and 9.7 per cent in 2020.

“The region’s mobile phone market is clearly going through a challenging period due to macroeconomic conditions such as weak oil prices and Saudiasation. Saudi contributes around 70 per cent to the total shipments,” he said.

Value added tax

Moreover, he said that there are multiple reasons for the fall next year. The first thing is that the disposable income is going to shrink due to the five per cent value-added tax in the UAE and the next big issue in Saudi Arabia is the tax on expats’ dependence.

“A lot of expat population in Saudi Arabia are expected to return home by the second quarter and that will impact the market. People will think twice to buy expensive phones and luxury purchases will shrink,” he said.

Nabila Popal, senior research manager at IDC, said that changes in consumer behaviour have resulted in refresh cycles becoming longer, while the lack of truly innovative and differentiating features incorporated within new models is also hampering demand.

“We have also seen a change in some vendor strategies as they switch their focus from volume to value,” she said.

She added that brands that remain most relevant to consumers will be best positioned to sustain the market during and after this difficult phase.

© Al Nisr Publishing LLC 2017. All rights reserved. Provided by SyndiGate Media Inc. (Syndigate.info).