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Gifting season provides cheer for tech marketers

Enough room for all brands to grow

Gulf News


Apple came back strongly into contention with all three of its latest releases — iPhone 5, iPad Mini and iPad 4 — getting the boost from the frenzied holiday buying in the UAE during December. Apple’s surge comes after a relatively quiet two to three months when the local marketplace was awaiting the official launch.

Brick-and-mortar retailers as well as online shopping portals are confirming the trend. “If it weren’t for the supply drop in the last week of the year — and there was no way distributors here could have had any control over it — Apple sales could have been much higher,” said Neelesh Bhatnagar, CEO of Emax, which has just made a move into online selling to support its store network. “There is a lesson for Apple and it should be that this region be placed even higher in the pecking order for supplies.”

Retail sources believe an improvement in new supplies should come by the second half of January, which could set off another spurt of demand during DSF. However, DSF promotions will not see price drops given these are still new to the market, but rely on add-ons.

While there was no doubt iPhone 5 would be a runaway winner, there were doubts over whether an untested iPad Mini could pull its weight. That it did owes a lot to the price point at which the base model was introduced.

“At Dh1,299 for the entry-level version, it was a good Dh100 and more lower than what the grey market was expecting it to be and that effectively knocked them out of the picture for the Mini,” said Nadeem Khansahab, head of retail at Jumbo Electronics. “The official pricing hit the sweet spot as a seasonal gift and demand over December is linked to that.”

Currently, the Mini makes up 35 per cent of Jumbo’s Apple sales, which could then settle down to around the 25 per cent in due course. The iPhone 5, with its higher price points of Dh2,749 and over, is the cash-churner for Jumbo and weighs in at a substantial 50 per cent.

But has the demand spike for Apple come at the expense of other brands? Bhatnagar counters that this is not the case: “Independent surveys indicate that the smartphone market in the UAE is growing at 75 per cent and at those levels each of the primary brands have enough room. At our stores, this has meant both Samsung and a revitalised Nokia – with the Lumia 920 and 820 – are enjoying seasonal highs. Nokia is actually seeing a return of buyers that it had earlier lost.” Niranjan Gidwani, deputy CEO at Eros Group and Samsung’s distributor, sees a crowded smartphone marketplace is all to the good. “The hype around these [recent] launches is driving people to the stores where they have an opportunity to compare,” he said. “Locally, between SIII and Note II there is a 70:30 split — S3 has enjoyed a longer shelf life and been an ideal gift during the festive seasons.

“Tourists are another major source as we see good sales from Dubai Duty Free as well as in local malls.”

As trendy product lines go, smartphones and tablets have no intention to vacate the centre stage.