High-end and entry-level smartphones may dominate the headlines, but it is the mid-range models between Dh500 to Dh1,000 that have a bigger growth story to tell, according to vendors at Abu Dhabi Electronics Shopper.
The four-day event, which concluded yesterday at Abu Dhabi National Exhibition Centre, was dominated by smartphones from the United States, Europe and Asia. But retailers say high-end devices are becoming less important in the market as the differences in technology and operational functionality become marginal.
“We have 14 different outlets across the UAE and everywhere it is the same story – the boom is in the Dh500 to Dh999 segment,” said Hevi Serdar, the business development manager for Comtel. “Whether it be in Sharjah, Ras Al Khaimah or Abu Dhabi, people understand that a phone’s functionality changes very slightly at the top end. There may be better materials used and the quality of finish may be slightly better at the top end, but it is marginal and now the mid range can fulfil most people’s needs for design and functionality. ”
It is a shift in the market that manufacturers are keen to tap into. The struggling BlackBerry launches its Leap in the US next month – set to cost US$275, according to the company – targeting the mid-range market. Microsoft, Tecno, Infinix, Alcatel and Samsung have a strong grip of the mid-range segment, with new players such as Wiko looking for a piece of the pie.
“Mid-range Android phones are the growth story across the planet, although value phones are also growing,” said Nabila Popal, a regional research manager at the market intelligence firm IDC. “Mid-range smartphones from Dh400 to as high as Dh1400 are the growth story in the UAE and wider region. This is a problem mainly for Samsung, as Android users are not as brand loyal as iOS [Apple] buyers. People did migrate from Apple when it didn’t offer a bigger screen, but now that gap in the market has been filled with the iPhone 6 and 6 Plus, so Samsung is really getting squeezed across its range.”
Smartphones in the Middle East priced between $80 and $150 jumped to a 23 per cent market share in the fourth quarter of last year from 10 per cent a year prior, according to IDC. Phones below $80 jumped to 10 per cent from 1 per cent over the same time period, whereas phones above $450 dropped to 31 per cent market share from 45 per cent.
The Android sentiment was echoed by one of the biggest exhibitors at the electronics show – Plug-Ins. The company forecasts 40 per cent growth in sales on last year’s event, mostly driven by mid-range models. Such is the push in the mid range that Plug-Ins has launched its own brand phone – the AF8, a 5.5-inch device sporting an octa-core processor and Android’s superannuated KitKat software that rivals most of its higher — priced competitors for Dh599.
“We only launched the AF8 last month,” said Sean Connor, the general manager for Plug-Ins. “It is a beautiful phone and can do everything, and more, than some of its big-brand competitors. We have had to rush a second order through from China to cope with demand.”
The UAE’s booming smartphone market has affected sales of laptops and tablets – devices that in the past customers would typically upgrade every 12 months. Today that upgrade only happens every 24 months, according to industry experts.
“The smartphone market means people do not use their laptops as much as before,” said Anil Warang, the regional distribution manager for Toshiba Middle East. “The rate of obsolescence has changed in laptops as people do not need to upgrade as quickly. We have about 12 per cent of the market in the UAE, however prices are dropping as competition increases. But the market is still growing as desktops decrease.”
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