UAE retailers mull iPad price cuts to fight Apple store

Retailers looking at options to compete with new Apple online store

Tags: Apple IncorporatedE-commerceJacky's ElectronicsPlug-Ins ElectronicsUnited Arab Emirates
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UAE retailers mull iPad price cuts to fight Apple store Retailers such as Jacky's are looking at ways they can maintain strong sales of Apple devices.
By  Elizabeth Broomhall Published  September 25, 2011

The price of iPads and iPods in the UAE may be set to drop as electronics retailers mull discounts in a bid to compete with Apple's first online store for users in the Gulf state.

Dubai firms Jacky's Electronics and Plug-Ins, whose profits have soared with the growth of tablet technology, say the new online store will put pressure on local outlets to cut their rates.

"In the short term, it's for us to make a decision: either we [keep the iPad] at current market prices or we bundle [it] with something else to add to the offering," said Ashish Panjabi, COO of Jacky's Electronics. "That it is something we will have to take a decision on. We are working with our suppliers to see how we can improve the pricing."

The pricing of iPhones will not change, he said, as the handsets are sold under a du or Etisalat-linked service plan.

US-based technology giant Apple is pushing to improve its sales in fast-growing emerging markets. Its virtual store offers iPad 2s from AED2,099 ($571) and iPhones from AED1,899 ($517), alongside customised Apple products with individual specifications for memory and drives.

Retailers told Arabian Business earlier this month they had seen a surge in revenues on the back of strong sales of Apple's iPad.

Jacky's Electronics said sales of the tablet had accounted for about 14% of all technology sales in the year-to-date, a figure expected to rise to over 15% by the year-end.

Plug-Ins said the company had seen a ten percent growth in sales compared with 2010, with particularly strong revenues during the summer months.

"I think would be hard to find anybody who is happy about an online competitor kicking off," said Omar Abushaban, general manager of Plug-Ins. "They definitely have an advantage in that there are no overheads so they can afford to drop prices. It is undercutting some of the retailers a little bit."

"For the most part, retailers on a level playing field, but when you go online... because there is no distributor in the middle, [you] can play with pricing a little bit and bring it in line with the US and UK."

The company hasn't ruled out lowering the cost of its Apple products in the future if it struggles to maintain sales against the US firm's cheaper online prices.

"The UAE is a very price sensitive market but there is a very low adoption rate in terms of online purchasing, so we're not sure how things are going to pan out," he said.

"One thing's for sure, we're going to continue to be competitive. That particular part of the business, that brand and category is so crucial, I don't think any retailer can afford to be undercut."

Apple, which has conquered the high end of the phone market with its iPhone, saw its market capitalisation soar to $340bn in August on the back of its innovative technology products.

The firm's move to open a store may signal the Gulf market is now on Apple's radar, which could lead to the stabilization of prices for the regional supply chain, said Panjabi.

"Apple has traditionally neglected this part of the world, so it is good to see Apple taking notice of the region," he said. "We haven't had the iTunes music store available, we haven't had a lot of the Apple services available in this region, so I think it's a welcome step that Apple is starting to take this [region] more seriously."

2555 days ago
Dr./ Sherif ELNAYEB

I will be harsh little bit for the honesty, but UAE electronic retailers like the above mentioned names are ALWAYS OVERPRICED, iPad 16gb wifi/3g was sold over 3000AED on launch and their claim that its a Pre-Release offer while its in the Virtual market for minimum 200$ Less with the shipment, iPhone for an example they all changed the facts and claiming that its linked via Du and Etisalat, well its not you could buy you iPhone from both linked or TOTALLY FREE AND UNLOCKED starting 2449 ( Which i bought 1 myself from Du) and i can install any SIM card in it, while outside they used to sell it between 2800-3200 for 16GB (Rip-Off) and claiming its unlocked and waw has "FACETIME" which when you create an account few month back UAE was not on the list, i guess UAE Electronic retailers should take a look back and review their Pricing and Original warranty strategy of their goods and be fair with the prices, and if you notice that since almost a year and ONLINE Shopping (Websites outside UAE) is increasing dramatically to overcome the overpricing of those retailers, at the end i was happy that apple opened its online shopping to prove that i am right, and hope the rest to not treat us as if we don't know.
and will not talk about the iPad, because we all know about the price range in those retails and how they are overpriced from the virtual market and now from apple it self , and yet they are THINKING to reduce?? well they have to now :)

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