Smartphone obsession drives UAE household electronic spending to Dh4,875 a year

Majority of consumers in the UAE replace their smartphones once every six months, one of the quickest churn rates in the world.

Shoppers buy smartphones at the Abu Dhabi Electronics Shopper show at ADNEC. Delores Johnson / The National

Smartphone purchases helped to push up the average household spending on electronics in the UAE to Dh4,875 last year.

That was up from Dh3,000 the previous year, a 62 per cent increase, according to a study from the retailer Plug-Ins Electronix.

The near-200 per cent mobile penetration rate and improving economy has pushed up sales of gadgets in the country.

Almost 2,000 people participated in the survey, which was conducted online across the nation, focusing on smartphones, televisions, laptops and tablets, and cameras.

About 94 per cent of the participants made an electronics purchase during the past year. Smartphones topped the list of purchases with 66 per cent, followed by televisions and tablets with 40 per cent and laptops with 38 per cent.

“Consumption growth is already robust and I think it accelerates further from here,” said Simon Williams, the chief economist at HSBC Middle East. “Confidence is high, growth is strong, employment is rising and wages are starting to trend upwards – this really is the sweet spot in the UAE’s economic cycle.”

Close to 74 per cent of respondents plan to purchase a smartphone within the next six months, giving the UAE one of the fastest churn rates in the world. In Europe, the average customer replaces their smartphone once every 18 months. UAE consumers are more likely to be influenced by brand rather than price, and the most popular brand in the country was Samsung with 55 per cent of sales, followed by Apple with 40 per cent and BlackBerry with 26 per cent.

“Lifestyle changes mean that people increasingly regard it as the norm to have a smartphone because of the features it offers. There is a keen appetite for consumer electronics in the UAE, and Dubai in particular is a retail centre for the Middle East so vendors make it a priority when they launch devices in the region,” said Matthew Reed, the principal analyst at Informa Telecoms and Media.

Branding is also very important when it comes to tablet and laptop purchases. While laptop sales have decreased and tablet sales have slowed down, the next opportunity may be in the phablets segment.

Consumers are also looking to upgrade their televisions this year to larger screen sizes. The 30 inch to 39 inch screen sizes dominate the market with a 51 per cent share, but about 43 per cent of respondents said their next television purchase would be a 40 to 42 inch screen size, while 33 per cent are planning to upgrade to 46 to 50 inches. While advancements in technology was the main factor in buying a new television, energy efficiency also came out as a key factor in purchasing decision.

Sales of digital SLR cameras are up, with 74 per cent of participants claiming to have bought one over the past year, while sales of point-and-shoot cameras have fallen by 2 per cent since last year.

The majority of users are now using the internet to carry out research before buying a product, and almost half of the respondents spend anywhere between one to three hours inside retail stores before making a purchase.

“We have three big finds in this year’s survey. The first is that the average spending of the UAE consumer has risen to Dh4,875, which is an impressive growth from the Dh3,000 value we recorded in the last survey,” said Sean Connor, the general manager at Plug-Ins.

“The second point to note is that camera resolution is an important influencer for the purchase of smartphones. The final find is that while size and resolution remain top purchase influencers for televisions, energy efficiency is a new surprise influencer.”

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