Between his Nokia and his second-hand Samsung Galaxy Mini, Roshan Ghale, an Abu Dhabi taxi driver from Nepal, spends one-tenth of his monthly salary on phone credit.
If he hits his targets he earns Dh3,000 per month. As much as Dh300 is spent on talking and texting – he thinks it is money well spent.
“I buy about 150 minutes every month, and use lots of internet to talk to my family in Nepal,” he says. “My old phone is a Nokia – I like it because the battery lasts three days. The Samsung I use mainly for Facebook.”
Consumers such as Mr Ghale are why the smartphone wars are spreading down the income ladder across the region. The trend threatens one of the world’s last big markets for the humble handset.
On building sites and taxi queues around the country, old Nokia handsets are being traded for newer and smarter models.
Worldwide smartphone sales topped one billion last year and set a new record in the fourth quarter, surging by almost 30 per cent from a year earlier to reach 367.5 million units, according to Gartner data released on Thursday.
“The availability of smartphones at lower prices accelerated the migration of feature phone users to smartphones, pushing the smartphone operating system (OS) market to double-digit growth in most emerging countries,” Gartner said
Bashir Jawwal, who works in a shop along the capital’s biggest strip of mobile phone retailers, says that almost all taxi drivers have two phones these days – a Samsung for seeing pictures and video from home, and a Nokia for the battery life.
In the UAE, smartphone sales increased last year by 31 per cent to 2.9 million units, while sales of basic “feature phones” fell 24 per cent to 1 million units, according to data from the consumer research firm Euromonitor.
Smartphone prices are expected to fall by more than a third over the next three years, driven by new market entrants and the expansion of existing product ranges.
“A lot of new players have moved into the market,” says Ashish Panjabi, the chief operating officer of Jacky’s Retail, one of the UAE’s biggest electronics retailers. “But even established brands like Samsung have introduced a large range of new products. Once upon a time the Galaxy was exclusively a high-end product, but now you have the Galaxy Ace, the Galaxy Grand, the Galaxy Mini – all different products that have joined the family to address different price points for different market segments.”
The growth of low-cost smartphones has taken market share away from older manufacturers. Nokia has struggled to cope with the shift away from the basic-model market it has long dominated.
Costing as little as Dh60, feature phone sales have remained defiantly robust across the region even as sales tumbled in other markets. But that is changing fast as smarter handsets become cheaper, hurting manufacturers of basic models.
High churn rates are also lifting smartphone sales. Consumers are switching between phones more quickly, as prices fall and product ranges grow.
“We’re seeing consumers either upgrading from an entry level phone, or downgrading because they don’t see any benefit in spending more on a premium phone,” said Sharay Shams, who is in charge of Lenovo’s smartphone business in the Middle East.
“The entry and mid-tier segment is going to grow heavily,” he said. “In particular, there is little difference between Android handsets. So new handset brands are entering the market with good specifications and a good price point, and consumers are switching.”
Mr Panjabi agrees: “A lot more people come into the shop to trade up, after giving their old phones to the kids, the driver, the maid, the security guard, or whoever.”
Improved data connectivity in the home countries of expatriates has further boosted smartphone adoption.
On the Indian subcontinent, in China and in the Philippines, internet connectivity has increased and data rates are cheaper,” Mr Panjabi said. “The ability to send a picture brings a lot of joy at home.”
As another taxi journey comes to an end, Mr Ghale is looking forward to catching up on the news from home on the three-inch screen he holds in his lap.
For four of his six years in Abu Dhabi, he would have had to find an internet cafe to do so. Now, his family travels with him.
abouyamourn@thenational.ae
