Smart money

The Middle East smartphone landscape might have been rocked by the threats of some countries to block the very features — amid security concerns — that have driven rapid Blackberry adoption across the region, but the channel will be hoping that this is just a blip for a market that has enjoyed an explosive growth rate.

Tags: Apple IncorporatedHTC CorporationJumbo ElectronicsNokia Corporation
  • E-Mail
Smart money
More pics ›
By  Piers Ford Published  September 16, 2010

Life in the Middle East smartphone channel has suddenly got a whole lot more interesting just recently. At the time of writing, the Blackberry’s Canadian manufacturer RIM is embroiled in sensitive negotiations — and, presumably, round-the-clock development on its encryption technology — with several governments in the Gulf.

So far, it has achieved a temporary stay of execution for its data services in Saudi Arabia, while discussions continue apace with the UAE ahead of an October deadline, and a weather eye is kept on Lebanon, which is also currently reviewing security concerns.

Not surprisingly amid so much tact and diplomacy, neither RIM nor its smartphone competitors are saying much about the situation in public at the moment. The channel, too, is being circumspect. Nobody wants to jeopardise a market that has been on such a clear upward curve and seemed to chime so perfectly with evolving demand for mobile services in the region.

“Smartphones have been a driver of sales for us in the last 18 months and have been one of our fastest growing categories,” says Ashish Panjabi, chief operating officer at retailer Jacky’s Electronics.Panjabi says the smartphone category is that rarity: a market that has shown double-digit growth. “For example, during GITEX Shopper last year, we ran a promotion on Blackberry smartphones where we yielded a growth rate of over 100% from the previous year to that point that we were inundated for weeks after the event with trying to get everyone’s service activated,” he says.

“Smartphones today play an integral part of any promotion or event we do as they not only bring average selling prices up in the mobile telecommunications segment in general but also help us develop a longer-term relationship with our customers — smartphones tend to have a shelf life of 12 to 24 months before we see them getting replaced.”

Haresh Thawani, head of telecom at another retailer, Jumbo Electronics (main picture), tells a similar story. He says the upward trend is down to better pricing and lower rates for data packages. “For us, the smartphone category has emerged as the frontrunner in terms of value and volume sales,” he comments.

“The category holds immense importance for us and as a result we now have a dedicated area for smartphones across our stores. Visibility for the segment is significantly higher than for others,” adds Thawani.

The implications of blocked Blackberry services at such a crucial stage in the market’s evolution are clear. When interactive agency Omnia Connect recently conducted a survey on the mobile internet habits of UAE consumers, it revealed huge potential demand for mobile content and services — although customers are frustrated by a lack of mobile-optimised web sites and slow connection speeds. In other words, there is everything to play for, for vendors and the channel alike.

“We have seen demand for phones offering e-mail, web browsing and social networking increase dramatically,” says Nikitas Glykas, regional director South Eastern Europe and the Middle East at smartphone vendor HTC.

“HTC designs phones by observing the way people live and communicate, and then experimenting with design and technology to find the right mix for different consumers. This is why we have introduced phones in the Middle East that cater to specific regional needs. The momentum behind mobile internet trends enjoys strong support from Middle Eastern consumers. Another key trend that influences them is the demand for Arabic applications and content — which is why we provide applications like Holy Quran, Prayer Times, Dictionary (English to Arabic and vice versa) and Hijri Calendar on our phones.”

Closer collaboration between vendors and operators, particularly on the data package front, have played a crucial role in firing up competition and engaging the channel in generating value-added sales.

Retailers like Jacky’s Electronics and Jumbo Electronics typically carry comprehensive smartphone lines from all the major vendors — Blackberry, Apple, HTC, Nokia, Sony Ericsson, Samsung, LG and Acer.

According to Thawani at Jumbo, the days are long gone when only Apple and Blackberry provided user packages. With most vendors now offering sophisticated data packages, they have all become a viable and lucrative proposition for the channel.

“Selling a smartphone as compared to a normal mobile device takes more effort,” he says. “Hence the vendors provide better margins to retailers to keep them motivated towards this growing category.”

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code