The Chinese smartphone makers Huawei and Lenovo are growing rapidly in the Middle East as cheap, good quality handsets prove popular with the region’s consumers.
As cost-conscious customers opt for cheaper smartphones, the Chinese manufacturers have benefited, analysts at the International Data Corporation (IDC) said.
Data from IDC shows that 295.3 million smartphones shipped globally in the second quarter, a new record, as the market grew 23.1 per cent on the year. Shipments are expected to surpass 300 million for the third quarter, IDC said.
Most retail markets with higher average spending – such as the UAE and Saudi Arabia – are near saturation in terms of high-cost devices such as the Apple iPhone 5. So manufacturers are now seeking to sell phones to larger segments of the population, according to Melissa Chau, a senior research manager at IDC.
Consumers in the UAE and Saudi Arabia are increasingly seeking low-cost smartphones as second phones.
With Huawei and Lenovo, “you get a decent brand that you have trust in, and one that comes with aftersale service care – which is lacking for these companies’ regional competitors,” Ms Chau said.
Huawei global sales grew by 95 per cent in June compared with the same period last year. The company, which shipped 20.3 million units between April and June, is now the world's third largest smartphone manufacturer, behind Apple and Samsung.
“Huawei is more advanced than Lenovo in terms of penetrating international markets, in particular the Middle East. The Y series, its lowest cost smartphone, has been doing particularly well,” said Ms Chau.
“Huawei has been on a big expansion path, and has expanded its retail presence with branded stores, in order to strengthen its brand position.”
Demand for second phones in the UAE and Saudi has been rising as smartphone penetration exceeds 100 per cent.
“We’re seeing strong demand for low-cost smartphones as second phones when travelling,” said Ms Chau.
As a consumer buying a second phone, “you want something good enough, that gives you all the functionality you need” at a reasonable price, she said.
Huawei earned revenues in excess of $2 billion from sales in the Middle East in 2012, the last date for which a regional breakdown is available. Revenue from Europe and the Middle East grew 9.4 per cent between 2012 and last year.
Lenovo, which has focused its Middle East strategy on Saudi Arabia and the UAE, has had its global sales grow 39 per cent in the past year, according to IDC’s quarterly Mobile Phone Tracker.
“Lenovo has chosen a few target markets in the Middle East with the greatest opportunity. It has nice-looking devices,” said Ms Chau.
The company, which recently acquired Motorola from Google, is set to release a new product range with bigger screens.
Samsung saw a slight dip in sales, but remains the market leader with 25.2 per cent of the smartphone market – and second quarter sales of 74.2 million units.
abouyamourn@thenational.ae
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