Why Handset Players will look forward to Middle East & Africa Market For Their Growth Plans?

The fourth quarter of 2016 recorded a 3% growth year-on-year and a healthy 11% sequential increase in handset shipments. Middle East and Africa (MEA) (+16%), Asia (+6%) and North America (NAM) (+1%), were the regions that registered year on year growth. MEA had the highest YoY growth rate among all the regions and accounted for almost 14% of the total global shipments. China and India continued to be the two largest markets and can be viewed as regions in themselves. These two countries combined accounted for 37% of global mobile phone shipments.

Smartphones remained the key driver for growth and represented around 80% of total handset shipments. Smartphone shipment registered a year-on-year growth of 8% and a sequential increase of 15%. MEA was the fastest growing region (21% YoY growth), followed by Asia (10% YoY), in the quarter.

Meanwhile, feature phones demand continues to decline (-13% YoY). After Asia, MEA (28% share) was the biggest contributors in terms of feature phone shipments. MEA and India are the only regions where both smartphones and featurephones saw positive YoY growth.

Chart 1: Mobile Phones Annual Growth in Key Markets, 2012Q1-2016Q4

Chart 2: MEA Country wise Handset share

Source Counterpoint Research Market Monitor: Market & Vendor Analysis Q4 2016

Key Highlights:

  • Global mobile phone shipments grew 3% YoY and 11% sequentially driven by growth in MEA and APAC region.
  • LTE shipments grew a healthy 16% YoY in China, India (+73% YoY) and MEA (+65% YoY).
  • In MEA, Samsung was the bestselling smartphone OEM with 24% share and Itel was leading the handset market with 17% share by volume in Q4 2016.
  • Huawei which is second by volume in smartphones continues to expand in MEA region and launched mid end phones and at the same time targeting APAC excluding China region through its Honor brand.

To summarize, we believe that more OEM’s will look forward to Middle East and Africa market for their international expansion in 2017 and beyond. The growth potential is huge but handset players also need to watch out the other scenarios including political instability, currency decline, changing regulatory and policy frameworks within certain countries to ensure quick scale.