Market Monitor - ICT Industry - UAE

Market performance at a glance

United Arab Emirates

• The UAE’s ICT market (mainly consisting of PC, other computer hardware, software & services) is estimated by BMI to be worth EUR 3.6 billion in 2014. PC sales and services accounted for the majority of sales, with a 40% and 33% market share respectively.
• The ICT value chain encompasses vendors, distributors, power retailers, resellers and other small retailers, while manufacturing is not present. Most of the vendors and distributors are present in Dubai’s free trade zones, and redistribute to the wider Middle East.
• The UAE’s ICT market is currently characterised by high competition, single-digit margins, low entry barriers and stagnating growth in sub-segments like PCs and desktops. Volume growth in ICT is reported to be higher than value growth due to a decline in the average sales price of ICT products.
• Payment delays and protracted defaults are quite frequent, as are runaway cases due to cash problems in this industry.
• Our underwriting stance is rather selective and especially cautious on distributors and resellers exporting to high political risk countries in the Middle East and Africa.
• As Dubai has significant re-export trade with Iran, any uplift of sanctions would significantly benefit ICT traders in the UAE.