Business | Technology
Will technology sales ride out the crisis?
An editor recently asked, "Everyone is buying new phones. Doesn't anyone know there is a credit crisis on?"
- By Scott Shuey, Chief Business Reporter
- Published: 23:21 November 14, 2008
An editor recently asked, "Everyone is buying new phones. Doesn't anyone know there is a credit crisis on?"
Certainly, but that doesn't seem to stopping people from buying mobiles, computers and video games.
Yet.
It will be hard to tell if the credit crunch does have any impact on consumer electronics. At the moment, there seems to be a surge in buying, although current figures - from anyone - have always been hard to come by in Dubai. Certainly the figures coming out about last quarter look hearty, but that can be attributed to Gitex, when mobile phone and computers sales usually jump. Intel officials said their channel partners were well-stocked for the event.
Video game sales certainly haven't taken a hit locally. Anyone who wanted to see how strong that consumer segment is just had to stop by the Geekay Store (yes, despite what you may have heard, there is an "a" in the store's name) at the Mall of the Emirates on Wednesday night.
There were an estimated 500 people in front of the store waiting for the midnight release of The Wrath of Lich King. The game is the most recent expansion to Blizzard software's World of Warcraft series, an online massively multiplayer online role playing game (MMORRG), which already has an estimated 11 million users worldwide. Customers, who included everything from young expats to middle-age Emiratis, each put down Dh169 for a copy of the game, which costs an extra Dh55 a month in subscription fees to play.
But do a bunch of gamers jostling for the latest release and a bump in sales from a well-established and advertised tech show really mean the region's consumer electronics industry is strong? Probably not.
The real question is whether the big ticket items, such as large flat-screen TVs or cars with the latest onboard computer systems are selling well. Again it's hard to tell without seeing retailers' numbers, but the scuttlebutt is that the recent stall in property sales, the announcement of layoffs and a plummeting stock market are going to make people really think hard about what they need.
Sales pitch
Some people are arguing that to some extent consumer electronic will not be hard hit from a slowdown. "Oh sure," the sales people like to explain, "But people need their phones. They need their computers. It makes them more efficient and productive."
Rubbish. What we need and what we've gotten used to are different things. I'd like the new BlackBerry Bold, but when it comes down to it, I need a phone that allows me call people. I need to access e-mail, not a high-speed data connection that allows me to download the latest movie trailer. And exactly how does integrating an MP3 player into my mobile make me more productive?
Prices on some phones are already coming down, and I'm willing to bet they will continue to fall.
Nokia's E90, which retailed at about Dh3,500 when it was released a year ago, has already dropped to Dh2,200 for some models, although the release of smartphones such as the Bold could just be forcing the price down through normal competition.
But for now, people are stilling buying, but if you press anyone in the industry for real information, all you get these days is a shrug and a quick "but it makes them more productive". That's going to be a tough argument to swallow by someone who just lost his job.
At the moment, there's seems to be a surge in buying, although current figures have always been hard to come by in Dubai.
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