• Q2 was the market’s second consecutive quarter of growth, as the macroeconomic environment remained relatively positive largely due to the robust performance of the non-oil sector.
• There was a noticeable improvement in consumer sentiment compared to 2022, as evidenced by the strong Ramadan sales season this year.
• Samsung and Apple continue to lead the market in Q2 2023.

Saudi Arabia’s smartphone shipments recorded 35% YoY growth in Q2 2023, according to the latest research from Counterpoint’s Market Monitor Service. This was the market’s second consecutive quarter of growth, as the macroeconomic environment remained relatively positive largely due to the robust performance of the non-oil sector. Furthermore, there was a noticeable improvement in consumer sentiment compared to 2022, as evidenced by the strong Ramadan sales season this year.

Ramadan sales and e-commerce activity up YoY

Ramadan holds much importance for both consumers and retailers in Saudi Arabia. Lasting 7-8 weeks, the Ramadan sales season is the longest in the country during a given year, with customers spending a significant amount on gifts. During the Ramadan months of 2023, spending activity recorded strong YoY growth. According to the Saudi Central Bank, consumer spending grew 10% YoY in Q2, with the point-of-sale (POS) and e-commerce transactions (MADA cards) also growing 13% and 30% YoY, respectively.

During the Ramadan sales season, OEMs and retailers deploy various strategies to attract customers. This year, these included creative marketing campaigns such as Samsung’s ‘Stay Apart, Stay Together This Ramadan’ and HONOR’s ‘Memories Together’. Offers included attractive discounts, some as high as 50%, bundled offers and free accessories. Some e-commerce channels extended the duration of their sales to further benefit from the positive consumer sentiment.

Additionally, e-commerce activity continues to rise due to digitalization, substantial promotional activity, easy financing options like ‘Buy Now, Pay Later’ (BNPL), and convenient delivery services across the country. OEMs such as Samsung, Huawei and HONOR and e-commerce platforms like Noon and Jarir Bookstore hosted extended sale events, all contributing to growth.

Competitive Landscape

• Samsung achieved a 23% YoY growth in shipments during the quarter, benefiting from a stable supply chain and strong festive season performance. The brand saw sustained sales of the cost-effective Galaxy A series, as well as a good show by its new 5G and premium devices.
• Apple shipments more than doubled YoY owing to consistent demand for the iPhone 14 series, especially the Pro versions. Besides, the brand greatly benefited from the surge in online purchases and financing options provided by BNPL platforms like Tabby and Tamara.
• Xiaomi grew 17% YoY in Q2 2023, maintaining its third spot. The brand recorded growth in the $100-$149 price band driven by the Redmi 12C. The mid-tier Redmi Note 12 series also performed well.
• Motorola grew YoY in Q2, driven primarily by its compelling low-to-mid-tier offerings. Motorola has been improving the availability of its new launches in Saudi Arabia, including its latest foldables and the Razr 40 series.
• HONOR was one of the fastest-growing brands in Q2 2023, steadily improving product availability, channel presence and participation in domestic promotional events. During the Ramadan season, HONOR offered large discounts on its entire portfolio, from the HONOR 70 to the X series, available across all major channels like eXtra, Jarir and Noon.

Outlook

Saudi Arabia’s smartphone market is expected to record low single-digit growth in 2023. Further, H2 shipments are expected to decline YoY, largely due to Saudi Arabia’s oil production cuts causing a decline in the country’s overall economic activity. Nonetheless, we remain optimistic about the market, as digitalization and 5G networks continue to expand.