The Middle East and Africa (MEA) smartphone market recorded a 7 percent year-on-year decline in shipments in the first quarter of 2026, marking its first contraction after a relatively strong performance in 2025, according to the latest Market Monitor report by Counterpoint Research.
The downturn was largely driven by rising device prices linked to the ongoing global memory chip shortage, coupled with geopolitical tensions in parts of the Middle East that pushed up shipping costs and disrupted supply chains across several markets.
According to the report, these pressures combined to weaken overall demand, particularly in price-sensitive segments, even as structural upgrades in mobile technology continued to reshape the region’s long-term outlook.
Despite the contraction in shipments, the MEA smartphone market is witnessing a gradual shift toward higher-value devices. Counterpoint noted that premiumisation remains intact across several emerging economies, supported by expanding 5G coverage and planned phase-outs of legacy 2G and 3G networks in multiple countries.
This transition has fuelled a 42 percent year-on-year surge in 5G smartphone shipments in the region during the period under review.
The report also highlighted strong momentum in artificial intelligence-enabled smartphones, which grew 64 percent year-on-year in Q1 2026. However, this growth remains concentrated at the upper end of the market, particularly devices priced at $400 and above, indicating that AI adoption is still largely a premium-driven trend in MEA.
Counterpoint noted that the overall market performance fell short of earlier expectations, with memory price inflation emerging as a key constraint. The impact of escalating conflict in the Middle East became more pronounced toward the end of March and is expected to place further pressure on the market in the second quarter of 2026 and beyond.
On the macroeconomic front, the report pointed to rising layoffs and corporate downsizing in Gulf Cooperation Council (GCC) countries, which are pushing unemployment higher in premium markets. At the same time, increased fuel and logistics costs are feeding into broader inflationary pressures, reducing consumer purchasing power across the region.
These combined factors are reshaping buying behaviour, with consumers increasingly prioritising necessity over upgrades or premium device purchases. Entry-level smartphones, particularly those in the $50–$99 range, recorded the steepest decline, falling 41 percent year-on-year as they proved most vulnerable to both price increases and regional disruptions.
Looking ahead, Counterpoint warned that higher price segments may also begin to experience declines in the second quarter of 2026, as geopolitical uncertainty and macroeconomic pressures persist. The absence of strong seasonal sales triggers in several markets could further weigh on demand.
Brand Performance
In terms of competition, Samsung retained its leadership position in the MEA market, posting a 19 percent year-on-year growth. The company’s performance was supported by relatively stable pricing, strong inventory availability, and a diversified premium portfolio that helped it weather the memory-driven cost pressures. The rollout of its flagship S26 series also contributed to its gains.
Chinese original equipment manufacturers (OEMs), including Transsion and Xiaomi, faced greater pressure during the period, with supply constraints reportedly affecting retail availability in some Middle Eastern markets. However, these brands continue to maintain stronger footholds in Africa, where Transsion’s TECNO and itel remain particularly dominant in the mass-market segment.
HONOR emerged as one of the fastest-growing players in the region, recording a 154 percent year-on-year increase in Q4 2025, albeit from a relatively low base. The brand’s deliberate push into premium segments appears to be gaining traction, helping it strengthen visibility among higher-income consumers across selected MEA markets.
Overall, the report suggests that while structural demand for smartphones remains intact across MEA, short-term market recovery will depend heavily on price stabilisation, easing supply chain constraints, and a reduction in geopolitical and macroeconomic uncertainties.
