'Overwhelming' iPad sales boost UAE electronics market

Retailers see surge in revenues on popularity of tablets, higher number of tourist shoppers
'Overwhelming' iPad sales boost UAE electronics market
An Apple store in US. Electronics business in UAE has been boosted by strong sales of Apple’s iPad (Getty Images)
By Elizabeth Broomhall
Thu 08 Sep 2011 03:22 PM

UAE electronics retailers who have recorded a surge in revenues this year say business has been boosted by strong sales of Apple’s iPad.

In interviews with Arabian Business, Jacky’s Electronics, Jumbo Electronics and Plug-Ins said there had been an overwhelming response to ‘tablet technology’ during 2011, with iPad dominating the market.

“One of the great things about this year is that we are seeing the full adoption of the tablet technology,” said Omar Abushaban, the general manager for Plug-Ins.

“Last year [the sector] was still in its infancy stages – the iPad was just kicking off last June, and it wasn’t really available in the market.

“This year, due to the breadth of the line up in tablet, we are seeing strong sales across the board. The iPad overwhelming has the majority share.”

The company saw a ten percent growth in sales compared with 2010, and noticed particularly strong revenues during the summer months.

Jacky’s Electronics, which has also seen growth during the year, said iPad purchases accounted for about fourteen percent of all IT sales in 2011, up from around four percent last year.

By the end of December, the firm expects iPad sales to make up around fifteen-eighteen percent of all IT sales.

“We've had certain products that have been quite exceptional over the last eighteen months or so in the tablet segment, that seem to have come out of nowhere,” the COO of the company, Ashish Panjabi told Arabian Business.

“These are now our top selling categories - so that's definitely added to our bottom line.”

Other reasons for market growth include a rise in the number of tourist shoppers, attracted to Dubai for the availability and low price of goods, retailers said.

The mobility market is also proving lucrative as average selling prices continue to rise, despite a downward trend in other categories such as laptops.

“Mobility is one of the few categories where we still enjoy an increase in average selling price, due to new product lines,” said Abushaban of Plug-Ins.

“For example, we’ve just had the iPhone 4, and we're now looking forward to the iPhone 5. BlackBerry is launching a slew of new models before the end of the year, and there are other brands out there are coming up with new products that are driving up prices.”

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The replacement rate of mobile phones has been more regular than it was previously, according to Jackys.

“We recently launched the 9900 BlackBerry Bold,” said Panjabi, “and we've not been able to get enough stock. So people are upgrading a lot more often. That has helped us as well.”

The UAE consumer electronics sector has long been regarded as one of the leading markets in the country, with sales estimated to surpass $3bn this year according to a report by Dubai Chamber of Commerce and Industry.

Dubai, which remains the dominant market, accounts for around two-thirds of consumable electronic goods imported into the Arab state.

Typically boosting sales are a series of shopping festivals held in Dubai each year, which include Summer Surprises, Gitex Shopper, Consumer Electronics Expo and the Dubai Shopping Festival - accounting for up to half of sales for some distributors.

However, companies say the emirate lacks the appropriate retail space, which could force them to execute their expansion plans in new markets.

Going forward, firms are focusing on smaller shops selling specific items or most popular brands, instead of giant department stores.

“If there is the right retail space available [in Dubai] that could accommodate the new format for retailing, we might look at that,” said the CEO of Jumbo Electronics, Deepak Khetrapal.

“How many we open depends on space availability. If there’s space for to open six I’ll open six, but I don’t think they’ll be space. In the big malls there isn’t much available.

“Abu Dhabi is an area where we looking for more growth. We opened one store in the Marina Mall a few months ago, and now we’re looking at two more stores.

He added: “One potential site is the Dalma Mall, and the other one is Mushreq – we might want to invest there.”

In the UK, many consumer electronics companies are struggling to survive in what they say is a ‘fragile’ trading environment.

Earlier this week, electrical goods firm Dixons Retail reported a sharp fall in revenues, with like-for-like sales dropping seven percent in the three months to 23 July compared with a year earlier.

In the twelve months to June, UK electronics chain Comet saw a 6.8 percent slump in sales, pushing it into a £9m loss.

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