Stock - Apple
The iPhone 14 is getting some serious price cuts in the UAE ahead of next week's launch. Retailers are working overtime in clearing as much of these stocks as possible. Image Credit: Bloomberg

Dubai: It’s a good time to be a smartphone buyer in the UAE.

There’s the Apple iPhone 15 launch next week (and shipments to the UAE to follow immediately), while Samsung has just gone through with the release of the latest version of the Flip and Fold.

But beyond the new launches, what smartphone shoppers are seeing is some of the biggest discounts on handsets in recent times. And not just on previous year models. ‘Deep’ price cuts of Dh1,000 or over are available on the iPhone 14 Pro Max versions, and across a range of other brands.

This is the second sizeable promotion on smartphones/other tech gadgets available to UAE shoppers in as many months.

Retailers say these discounts are not just about clearing the deck for the iPhone 15, the first UAE sales of which will likely happen sometime in October.

Ashish Panjabi, Jacky's Group
"In organised smartphone retail, where we need to sell TDRA certified stock - which also gets officially covered by warranty - the retail pricing has been more stable," said Panjabi.

'Instant' price cuts

“Even (non-Apple) flagship smartphone launches from earlier this year have seen price drops of at least 10 per cent,” said a tech retailer. “This sort of ‘instant’ price drops are unprecedented, at least we haven’t seen it in the last 4 years.

“The steep discounts are happening because no retailer wants to be caught with stocks, especially of premium handsets. And then be forced to offer bigger price cuts later.”

And the reason? “There are latest model handsets flooding the UAE retail and wholesale space from China because of weaker consumer demand in that market,” said Saleem Javed, founder of Dubai-based smartphone vendor Touch Tel.

On top of that, there are reports this week of China requiring government employees not to bring their iPhone handsets to the office. Whether this will turn into a major negative for Apple in terms of demand for the iPhone 15 in China is the big unanswerable at this stage. (The Apple stock has already been feeling the shock waves of the China dynamic.)

Retailers here are certain that manufacturers/third-party shippers will divert unsold stocks to the UAE and Gulf markets at the first signs of a demand drop elsewhere. “Last year, smartphone shipments to the UAE from Asian markets other than China was a regular feature,” said a trader. “

Saleem Javed
"If China sales end up weaker for the iPhone 15, UAE/Gulf markets will immediately mirror that on the pricing front," said Javed. "And most certainly in the ‘grey’ market,"

UAE demand is stuck on a high

In terms of consumer demand, the UAE and Gulf markets have been the brightest spots for smartphone and tech gadget vendors since 2020. First, there was the ‘revenge spending’ drive as buyers upgraded their tech requirements through the Covid phase of work from home (WFH). That spending spree continued into 2022 and this year as more handset makers offered the super-premium fold/flip options.

All through this period, demand for the iPhone (and the Apple Watch) stuck steadfastly to a high. “In the UAE, the trend was not just about upgrading to a new iPhone – shoppers wanted to pick up the Pro/Pro Max models,” said a retailer. “If anyone has the data, it might show that Pro/Pro Max models would be having one of the highest demands on a per capita basis in the UAE.”

Will iPhone 15 be priced higher?

Apple will release the price structure next week, but industry sources here expect ‘some’ increase. Resellers speculate the increase could be ’10-15 per cent’ for the top end options.

"There is no doubt iPhone 15 will be an instant success on its UAE launch, whatever the price," said a retailer. "Apple already has a base of committed users who will go for the upgrade no matter what. For retailers, it's what happens after the first rush that counts for the most."

While the base model in the iPhone 14 series started at Dh3,399, the Pro and Pro Max were priced from Dh4,299 and Dh4,699. 

Smartphone pricing - a counter view
The handset dumping is more reflective of the trading market in Deira.

In organised smartphone retail, where we need to sell TDRA (Telecommunications & Digital Government Regulatory Authority) certified stock - which also gets officially covered by warranty - the retail pricing has been more stable.

When model transitions happen, pricing and demand always dips. In the case of the new iPhone, the speculation is that it will come with USB-C which has meant that many considering a change are waiting for the new device.

Accessory suppliers had already slowed down supply of Lightning accessories in anticipation of the USB-C transition.

The basic fact is that major brands like Samsung and Apple have got approximately 2 billion handsets in active use currently. With the average lifespan of a device being 2-3 years, hundreds of millions of smartphones will be replaced every year. If your phone doesn't work, you replace it with what is available at the time.

- Ashish Panjabi, Chief Operating Officer at Jacky's Electronics.