5G set to boost smartphone market value in the region

Unsplash/Creative Christians

• UAE has second fastest median 5G download speed in the world
• Mobile shipments in MEA fell 12.1% in 2022 to 148m units
• Retail chain said Samsung and Apple mobiles make up 90% of sales

Shipments of 5G smartphones to the Middle East and Africa region grew 47 percent last year, according to the latest industry data from Counterpoint Research Market Monitor.

The MEA region made up an 18 percent share of the overall shipments. While globally 5G smartphone prices are dropping as a result of the availability of more affordable models, the research revealed the number of 5G devices in MEA will help to boost the average selling price, as customers upgrade to more sophisticated devices.

“This, in turn, is likely to increase the dollar value of the MEA smartphone market, despite little to no growth in volume expected in 2023,” the report said.

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The appeal of 5G smartphones can also be attributed to the fact the UAE has the second fastest median 5G download speed in the world, according to research by Speedtest.net, also known as Speedtest by Ookla.

The US-based web service that provides analysis of Internet performance, revealed that the UAE was among the countries at 511.70 mbps (megabytes per second) in Q3 2022.

Only South Korea had a faster download speed in the third quarter at 516.15 mbps.

The report, Stable and Expanding: The State of Worldwide 5G in 2022, placed Bulgaria, Qatar, Saudi Arabia, Singapore, Kuwait, New Zealand, Bahrain and Brazil in the top 10 for 5G download speed.

Overall smartphone shipments in the MEA region fell 12.1 percent year on year in 2022 to 148 million units, the lowest shipment level since 2015, according to the Counterpoint research.

This was attributed to the rise in energy and agricultural goods prices caused by the Ukraine war dampening consumer sentiment in the region, with the macroeconomic situation gradually getting worse as the year went on.

In the fourth quarter of last year smartphone shipments dropped 18.4 percent compared with Q4 2021, a slightly better reading than the record low of the 20.4 percent drop recorded in the previous quarter. 

Counterpoint senior analyst Yang Wang said: “With the drop in consumer sentiment, original equipment manufacturers were put under enormous pressure and had to take drastic measures such as destocking, cutting marketing and channel spending, and taking a careful approach to pricing.”

In terms of shipments for particular brands, Samsung witnessed 4 percent growth in 2022, with Xiaomi up 2 percent. Apple fell by 2 percent and Oppo’s shipments were down 30 percent.

Oppo, owned by China’s multinational BBK Electronics, entered the Middle East in 2015 and is currently ranked fourth in the GCC behind Samsung, Apple and Xiaomi.

Lucy Aziz, senior PR and communication manager, Oppo, said: “It’s too early to say, but I believe it’s going to be a better year for sure.”

The company, which moved its regional headquarters from Cairo to Dubai in 2019, is also among the top two providers in Egypt, according to Aziz.

“On numbers, Oppo is not the biggest in the Middle East and that’s fair enough,” she said. “We believe this region has a lot of potential, innovation-wise, talent-wise and also as a market. There is a lot to be done in this region.”

Ashish Panjabi, chief operating officer at consumer electronics firm Jacky’s Electronics, said Samsung and Apple mobile phones make up 90 percent of sales in volume and 95 percent in value “with both registering a nearly doubling of sales” in the company’s sales channels.

However, despite this optimism, Ryan Reith, group vice president with International Data Corporation’s Worldwide Mobility and Consumer Device Trackers, previously cautioned of a “challenging” first half to 2023, before a resurgence towards the latter part of the year.

“Rising costs are an obvious concern for the smartphone market and adjacent consumer technology categories,” he said. “But we believe most of this reduced demand will be pushed forward and will support global growth in late 2023 and beyond.”