The high price of the official offer sees unauthorised vendors continue to sell discounted handsets.
Grey days for Etisalat as iPhones sold at cheap rates
DUBAI // Grey-market electronics vendors are continuing to sell Apple iPhones despite the official launch of the handsets by Etisalat in the UAE. At dozens of grey-market electronics shops, salesmen said iPhone prices had fallen sharply over the past few months, not only because of a falling demand for expensive phones, but also because the vendors hope to undersell some of the eight iPhone packages offered by Etisalat.
Etisalat last week became the country's first official provider of the iPhone, a touch-screen device using third-generation technology, known as 3G. The phone was introduced by Apple in 2007 and until now had been available in the UAE only from unauthorised vendors who, many believe, imported them illegally from places such as Italy and Hong Kong. Etisalat charges Dh3,090 for an unlocked 16-gigabyte phone, while the average grey-market price is Dh2,400, down from Dh4,000 a few months ago. For the 8GB model, the grey-market prices are around Dh500 lower than the Dh2,646 charged by Etisalat.
Phones purchased together with an Etisalat monthly service contract can cost much less, or even nothing at all. But there are steep fees for breaking a contract. Since Etisalat is selling the iPhone unlocked, it is allowing customers to switch to the du network and international operators. There is some confusion, however, over whether Etisalat is officially allowing owners of the iPhones purchased legally abroad, or on the grey market here, to sign up for Etisalat's special iPhone packages without buying a new handset.
Some customer service representatives at the company say yes, but an agent at the Virgin Megastore in the Abu Dhabi Mall said no. In an e-mail statement, Etisalat said only that it "encourages its customers to purchase the iPhone through the right channels to benefit from the warranties and latest updates while also avoiding the risk of losing data". The company said it lacked the jurisdiction to "impose restrictions on imports" and that the Telecommunications Regulatory Authority should be contacted about the issue.
When The National contacted the TRA, no-one would talk about it. A salesman at MixMax Trading, a small electronics store, predicted that lower grey-market prices, and the fact that non-iPhone service plans can still be used with the iPhone, would probably discourage some customers from buying the device from Etisalat. "The Etisalat package has a warranty, so a lot of people might find that it's safer to pay more for the services," the salesman conceded.
"But it's expensive, and there are the monthly charges involved with the service, so that might not make people want to buy from Etisalat." A salesman at Watch and Talk, another boutique electronics store, agreed. "When you buy here, or at any of the dealers around here, you can use the phone in the UAE or in any country you want," he said. "So it's easier to use." Some predicted that grey-market prices would fall even further as the economic downturn gears customer preferences towards less expensive phones. Several noticed sales spikes in the Nokia 5800, a 3G phone with features similar to those on the iPhone.
"When demand for less expensive phones grows because people have less money, of course you'll see people buying cheaper phones," said Rady Cn, a salesman at Union Electronics Trading. "I mean, some Nokia phones cost as little as Dh90." Mr Cn said the associated perks and security of buying into an Etisalat iPhone package could conceivably lure customers away from the grey market and thereby affect prices.
"I think in general you could see iPhone prices fall even more in the grey market, because there aren't any warranty offers and benefits," he said. firstname.lastname@example.org