Smartphone shipments in the Middle East (excluding Turkey) dropped 4% year-on-year to 11.7 million units in Q1 2025, according to Canalys (now part of Omdia). The decline follows a strong 2024 rebound, driven by softened retail demand, cautious consumer spending, and economic uncertainty. Falling oil prices and new US tariffs further strained oil-dependent economies, impacting consumer sentiment. Aggressive end-of-year promotions failed to counter these challenges.
Regional Market Performance
Saudi Arabia accounted for 26% of the Middle East smartphone market but saw a 12% shipment decline, attributed to reduced consumer demand during Ramadan as spending shifted to travel, food, and automotive upgrades. Iraq experienced an 11% drop, with falling oil prices increasing economic pressure and prioritizing essential goods over smartphone upgrades. The UAE saw a marginal 1% decline, supported by a resilient economy, robust retail activity during Eid al-Fitr, and increased tourist inflows. Kuwait reported 13% growth, driven by promotions during the Hala Festival from retailers like Xcite and Eureka. Qatar led with 16% growth, fueled by over 1.5 million tourist arrivals and a strong luxury retail sector.
Premium Segment and Vendor Performance
Shipments in the US$600+ premium segment grew 17% year-on-year. Samsung led with 19% growth, driven by its Galaxy A-series and Galaxy S25 Ultra, which accounted for 9% of its shipments. Samsung’s partnership with e& in markets like the UAE aims to strengthen its position in the premium Android segment. TRANSSION maintained a 43% share in the sub-US$100 segment, down from 51% a year ago, with Infinix contributing 9% to overall market share. Xiaomi, despite regaining third place, saw a 31% decline due to inventory adjustments and a cautious channel strategy. Apple achieved 10% growth, supported by iPhone 16 demand, buy-now-pay-later options, and expanded retail access. HONOR and Motorola grew 36% and 12%, respectively, through expanded retail presence and competitive product launches.
Market Trends
5G is no longer a primary upgrade driver, with 53% of Q1 2025 shipments being AI-capable devices. The Middle East is shifting toward experience-led smartphones, with demand for premium features and mid-range devices indicating potential for steady growth. Rising retail costs in Saudi Arabia and the UAE, alongside evolving trade dynamics, require brands to focus on ecosystem innovation, premium retail experiences, and partnerships to remain competitive.
