According to Counterpoint Research’s Global Monthly Handset Sales Tracker, Saudi Arabia’s yearly smartphone sales increased by 49 percent year on year in 2021, surpassing the pre-pandemic level of 2019. The primary growth drivers were the post-COVID-19 rebound and pent-up demand. Following a challenging 2020 marked by high COVID-19 rates and a faltering economy, the smartphone market benefited from global economic development in 2021, which was powered by increasing oil exports, growing employment, and dropping inflation.
Senior Analyst Yang Wang commented on market dynamics, saying, “Saudi Arabia’s smartphone market benefited from improved consumer demand owing to a strengthening economy and a higher speed of digitization, which was partially triggered by the COVID-19 epidemic.” In addition, the market has progressively adjusted to the mandatory 15% VAT hike beginning in June 2020, which has reduced sales in 2020. Huawei’s leaving threatened to slow growth in 2021, but Chinese firms such as vivo, Infinix, and Xiaomi not only stepped up quickly, but also increased to boost the percentage of Chinese brands to 41 percent in 2021, up from 29 percent in 2020.”
Despite a fall in its share owing to supply challenges and increased competition, Samsung topped the Saudi Arabian smartphone market in 2021. Apple came in second, with vivo and Xiaomi following next. If it hadn’t been for a dismal fourth quarter owing to supply issues, Xiaomi may have finished ahead of Vivo.
Chinese OEMs like as vivo and OPPO stepped up in 2021, capitalizing on Huawei’s withdrawal to increase their market dominance. OEMs in the Transsion group have had little success in their efforts to develop their business in the Middle East.
Infinix joined the top five rankings for the $200 and less price band in 2021, with its portfolio aimed at the budget segment and fresh releases throughout the sales season.
Nokia ranked fifth, with a slight YoY increase thanks to a revised portfolio, customer loyalty, and enhanced availability during seasonal sales events.
In 2021, 5G smartphone sales will also increase. “While smartphone penetration continues to be a growth driver, 5G smartphone penetration took off in 2021, expanding from 7% in 2020 to 35% in 2021,” stated Research Associate Ravyansh Yadav. The 5G smartphone market was led by Apple, Samsung, and vivo. 5G penetration reached its greatest level ever in Q4 2021, at 44 percent, thanks to the release of the iPhone 13 series. One in every three 5G phones sold in Saudi Arabia in 2021 will be an iPhone. With 5G coverage exceeding 70% in 2021 and operators reaching the conclusion of their respective 5G rollout roadmaps, 5G smartphone upgrades will be a key growth driver for the Saudi smartphone market in 2022 as well.”
While the price band distribution remained mostly unchanged from 2020, sales increase in 2021 was led by the $300 and below and $600 and above price categories. In 2021, sales in the $300 and less range increased by 55% year on year, owing to new OEM releases and customer upgrades. Sales in the entry-level segment increased as a result of customers’ continuous shift to smartphones. Overall, Samsung dominated the pricing category.
As earnings soared and inflation remained low, sales in the premium sector ($600 and more) increased 44 percent year on year, with Apple and Samsung accounting for more than 90 percent of the price band’s sales. However, sales in this area have yet to surpass the pre-pandemic level of 2019. The premium category in Saudi Arabia provides an opportunity for OEMs, with wages likely to rise again in 2022. Huawei’s departure has created a new chance for other OEMs to compete for the third slot in the premium sector.
As wages and employment continue to rise, digital initiatives and e-commerce activity expand, and 5G connection improves, the Saudi Arabian smartphone market is expected to increase by double digits again this year, but at a considerably slower rate than in 2021. Market growth will be determined by supply and economic difficulties caused by global semiconductor shortages, an unanticipated COVID event, and the present global political atmosphere.