IT distribution across the Gulf has come under significant pressure, with geopolitical disruption and supply chain constraints driving a sharp decline in revenues, particularly in the UAE.
Findings from Context’s latest ‘META report’ (Middle East Turkey and Africa) points to a marked downturn in distribution revenues across the Gulf, with both value and volume trends reflecting ongoing instability.
While Turkey and South Africa continue to perform above index levels, the UAE and Saudi Arabia are now tracking below, highlighting a widening regional divide.
“The UAE market has been particularly impacted following a period of geopolitical escalation that disrupted key trade routes and infrastructure,” says Dylan Chadha, MEA head of retail at Context.
“The closure and restricted access to the Strait of Hormuz, combined with port and logistics disruption, has significantly constrained the flow of goods into the region. “
This has created a clear imbalance between value and volume performance. In March, unit volumes fell sharply, while value revenues proved more resilient. The divergence reflects a market where high-value infrastructure projects continue to move forward, while volume-driven categories such as laptops and desktops are delayed due to shipping constraints.
Market performance across industries reinforces this trend.
Server infrastructure has remained strong, supported by projects already in-country, while desktop computing has seen a steep decline as supply chains stalled.
More broadly, infrastructure segments including servers, storage and security are expected to dominate spend in the near term, as organisations prioritise resilience, backup and continuity.
“The current disruption is fundamentally a supply issue rather than a demand problem,” adds Chadha. “Projects are still moving where inventory is available, particularly in infrastructure. What we are seeing is a pause in volume categories, not a collapse in underlying demand.”
Looking ahead, Context expects continued short-term pressure as shipping routes remain constrained and logistics networks take time to recover. Even with improved access, the backlog across global supply chains is likely to delay a full recovery until late Q2.
Despite near-term volatility, the structural outlook for the UAE remains intact. The country continues to serve as a regional hub for technology distribution, with strong underlying demand expected to return once supply conditions stabilise.