x Abu Dhabi, UAEWednesday 26 July 2017

Apple proves to be even tastier in UAE

Retailers across the Emirates report sales of iPhones, iPads and MacBooks are expected to grow at an even greater pace in the region.

Apple iPads for sale at Plug-Ins. Delores Johnson / The National
Apple iPads for sale at Plug-Ins. Delores Johnson / The National

Shoppers in the UAE can not get enough of Apple products after the US giant reported bumper quarterly profits of more than US$7 billion (Dh25.71) - which left Wall Street breathless.

Retailers across the Emirates report sales of iPhones, iPads and MacBooks are expected to grow at an even greater pace in the region, with many retailers confident of doubling sales of Apple products this year.

Omar Abushaban, the head of operations at Plug-Ins, says depending on the store, sales of MacBooks have grown between 20 and 35 per cent so far this year compared with the same period last year.

"That far exceeds the growth we have had in the IT category in general," says Mr Abushaban. "Macs have outpaced everything else."

Since the launch of the iPad 2 in April, retailers across the UAE have struggled to meet demand among shoppers, which has far outstripped supply.

"We have quite a long list of customers waiting for an iPad at every single store," says Mr Abushaban.

"The major issue is the supply of legitimate stock levels, it is even the same for companies who are dealing in the grey market."

Some electronics retailers buy products through channels that are not the official distributors in the region, offering them at a premium price and often with no warranty.

Retailers say this so-called grey market could be eradicated and sales could increase further if Apple became more involved in marketing in the region. Many retailers have called for Apple to set up its own branded store in the region that could also develop the aftercare and repair market.

Currently, Arab Business Machine is the only official distributor of Apple products in the Middle East.

"I think [Apple] can do more in the region," says Omar Kassim, the founder of the online retailer JadoPado. "Arab Business Machine is quite slow in starting up relationships and getting products out there."

Apple products are selling so strongly at JadoPado that for every 10 iPads the website sells, it sells one non-Apple tablet.

Ashish Panjabi, the chief operating officer for Jacky's Electronics, also believes Apple could up the level of marketing and penetration in the region, despite strong growth this year.

"The Apple buying experience is still very different to other parts of the world," he said. "Apple gets away with just word of mouth and social media sales."

Last year, Apple made up 2.6 per cent of Jacky's total sales and that has increased to 5.3 per cent so far this year.

Mr Panjabi says the growth in Apple products has been "dramatic" and the brand's products have "undoubtedly' helped drive his company's growth so far this year.

"The iPad was the creation of a product category when it came here last year, it's had a big impact in sales overall," Mr Panjabi says. "There's so much more that Apple can do here, we do not see it working as aggressively in this region as other parts of the world, so there's definitely more room for growth."

Apple's results beat analysts expectations this week with third-quarter revenues up 82 per cent and profits up 125 per cent, compared with the same period last year.

The company reported profits of $7.31bn or $7.79 per share with revenues of $28.57bn, compared with analyst expectations of $5.87 a share on sales of $25bn.

Its shares rose more than 5 per cent after the announcement, despite indications from management the level of growth is not likely to continue into the company's fourth quarter.

The shares have increased about 16.8 per cent this year and have fallen in only two of the past 10 years.

Peter Oppenheimer, the chief financial officer for Apple, said iPad 2 supply constraints had eased and more than 1 million remained in stock at the end of last month.

Matching the comments of UAE retailers, Mr Oppenheimer said demand was still outstripping supply in some markets.

Apple hinted a new product would be launched later in the year, with analysts now expecting a new iPhone 5 to be in stores by September.

Mr Panjabi believes many iPhone fans who had forked out on the version 4 would skip the new model, but all those who bought the original iPhone or the 3GS were sure to upgrade to the 5.

"The iPhone really kicked in in the UAE at the launch of the iPhone 4 last year, that's when Apple started to market it through the telecoms companies," he says.

rjones@thenational.ae