Dubai: A new UAE online Apple store launched on Monday is expected to cut into electronic retailers' profits and drive down prices of the company's products here.

The store, which will allow customers to shop online for a range of iPhone, iPad, iPod and Mac products, offers free delivery for products costing more than Dh520 and online credit card payment.

It also offers items such as the 16GB iPhone 4 for hundreds of dirhams cheaper than at local electronic retailers. The Apple Store is selling the iPad 2 at Dh2,099 and the iPhone for Dh2,299.

As a result, UAE electronic retailers could see a drop in electronics sales as the Apple online store undercuts their prices on some products, said Hamza Saleem, senior research analyst at IDC Middle East.

"With Apple going online, there is a slight conflict of interest between them and ABM (Arabian Business Machine) and the retailers. The website needs to only cover duties and transport costs for shipping, but the store has other overheads and its margin is affected. At the store you get the products instantly, but online you have to wait a few days. With these prices, it's worth the delay," said Saleem.

But he added that it still remains cheaper to buy some products through telecom operators like du and etisalat as they come with a data package. ABM, which is the official distributor of Apple products, was not available for comment yesterday.

Stock issues

Saleem said that the new store is not expected to resolve issues of stock shortages of popular Apple products, which resulted in many customers waiting weeks to get their hands on the iPhone 4 earlier this year.

"The same thing will happen after the online store opens. Apple has been late coming to Dubai as a vendor… It does not consider the GCC region a huge market. They don't have big stocks for the region, the website won't resolve that," he said.

Asked why Apple has finally opened its online store, Saleem said: "The iPhone has gained hype in the UAE market… it is the highest selling smartphone in the UAE."