Middle East phone users turn to Chinese budget brands

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• Unit sales in region up 39%
• Sales of Samsung and Apple fall
• Chinese phones ‘better quality’

Middle East consumers are embracing budget-friendly Chinese smartphone brands, as global favourites such as iPhone and Samsung suffer a slump in sales.

The Middle East’s smartphone market is flourishing, with shipments excluding Turkey reaching more than 12 million units in the first quarter of 2024, a year on year increase of 39 percent, a report by the market research firm Canalys has revealed.

The surge is attributed to lower inflation, robust economic growth in the non-oil sector and government reforms that are attracting investment and expats, particularly to the wealthy GCC countries.

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This has paved the way for Chinese smartphone makers to dominate the market, said Manish Pravinkumar, senior analyst at Canalys.

Buoyant Chinese smartphone brands include Transsion, with quarter on quarter growth of 10 percent, Xiaomi, up 7 percent, and Honor, up 4 percent. 

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Established smartphone manufacturers, meanwhile, are facing a downturn. Samsung’s Q1 volumes dropped 17 percent after weak sales of its lower-priced A-series models. 

Regional sales at Apple fell 14 percent.

In contrast, Samsung Europe reported growth of 7 percent while its US division gained 31 percent. 

Apple grew 2 percent in the US, while it slipped by only 1 percent in Europe.

“Chinese smartphone brands are winning over customers with better camera quality, larger battery capacities, and affordable pricing,” Pravinkumar told AGBI.

“Large immigrant populations and emerging markets like Iraq are particularly drawn to the attractive designs, powerful specs and affordability that Chinese Android phones offer.”

Currency stability was another important factor. “In these regions, where currencies are less volatile, retailers can secure better margins on Chinese phones compared to established brands,” Pravinkumar said.

Ryan Reith, group vice president of the market research firm IDC, said: “While we expect [Apple and Samsung] to maintain their hold on the high end of the market, the resurgence of Huawei in China, as well as notable gains from Xiaomi, Transsion, Oppo/OnePlus and Vivo will likely have both manufacturers looking for areas to expand and diversify.”

The growth of smartphone shipments within the Middle East itself is geographically diverse. 

Saudi Arabia experienced a massive 54 percent year-on-year jump, fuelled by a rise in tourism. More than 106 million people visited the country last year, passing the kingdom’s 2030 target of 100 million visitors.

The UAE, the second-largest market, grew by 19 percent, driven by a healthy tourism sector and increased retail activity.

In Iraq sales more than doubled, a clear sign of the strong demand for feature-rich Chinese phones. 

Israel suffered a 20 percent fall, with sales apparently affected by the war in Gaza, while Qatar recorded a 3 percent fall and Kuwait a 4 percent gain.