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Sun 16 Jan 2011 06:42 PM

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Du bans prepaid iPhone 4 sales as blackmarket trade booms

Du confirms illegal trade at 80% mark-up, Etisalat also suspends sales of the smartphone

Du bans prepaid iPhone 4 sales as blackmarket trade booms
UAE telco du has suspended sales of the iPhone 4 on prepaid packages
Du bans prepaid iPhone 4 sales as blackmarket trade booms
UAE telco du has suspended sales of the iPhone 4 on prepaid packages
Du bans prepaid iPhone 4 sales as blackmarket trade booms
Sales assistants at Etisalat stores across Dubai said they have also been instructed to suspend sales of the prepaid iPhone 4

UAE telco du has suspended sales of the iPhone 4 on prepaid packages in a bid to curb a boom in priced-up blackmarket sales, the firm’s chief commercial officer has said.

Smartphones sold unlocked for AED2,100 under the pre-paid package were being traded on the black market at a 50 to 80 percent mark-up, said Farid Faraidooni.

“We became aware of this trend through our network technologies, which detected a number of iPhone4 smartphones that had been sold by us and yet were inactive within the country,” he told Arabian Business. "We also received information from abroad that smartphones sold by du are actually operating in neighbouring countries.

“We have stopped the sales… to combat the sale of these smartphones on the black market.”

Sales assistants at Etisalat stores across Dubai said they have also been instructed to suspend sales of the prepaid iPhone 4, but blamed the decision on a lack of stock.

They were unable to say when sales of the pre-paid package would resume.

Etisalat declined to comment when approached by Arabian Business.

The iPhone 4 was launched in Dubai in September 2010, and has become one of the region’s most popular smartphones, sold by both du and Etisalat.

Globally, Apple sold more than 1.7 million iPhone 4s in the smartphones first week of release.

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David Chaddock 9 years ago

Surely Resale Market rather than Black Market is a more descriptive if Du are concerned about units they have sold and are then being sold on by the purchaser.
In addition I don't understand the comment "smartphones sold by du are actually operating in neighbouring countries". Actually Operating???? I think I would not be happy if a mobile phone (smart or regular) I had purchased did not work in another country.
I guess du have got the right idea. If people won't use the device where and how du want them to then they won't sell them. Solves the problem although not such a good marketing ploy for sales!

S Richards 9 years ago

This is good evidence that monopolistic trade doesn't work, people simply don't want to be tied up with overpriced mobile subscriptions. Du is already controlling the TV services in various areas in UAE and subscribers have simply no options to choose the quality of service they want,

Harry Barracuda 9 years ago

Wow iPhone 4 in "short supply". There's an Apple marketing trick you don't hear about very often.

BV 9 years ago

As far as I understand (and have experienced) you can't get a DU or Etisalat Package without handing over a copy of your passport and/or other ID. It should then be easy to find the culprit(s) and charge them accordingly.

If the person or persons responsible were not requested to submit the required details, then obviously someone at the point of sale did not do their job and should be charged accordingly.

Is it really worthwhile making a news story out of such a simple-to-solve issue?

Not to mention that most smart phones have a remote-locking option by which a code can be sent which then completely disables the phone until it is taken to a licenced service centre. Simple solutions guys.

Abu Zahra 9 years ago

If Etisalat and DU have their way they would sell the handsets at a price unheard of anywhere in the world. It is Apple's strategy to tie up with an operator and regulate the prices that Etisalat & DU cannot question. Otherwise Etisalat would have been selling the sets to anyone at an exorbitant price. Like they do with other telecom services.

Omar Shamma 9 years ago

I don't see the logic here. Du can either increase their price as if there is an active "resale" market then it is clear that the market can bear a higher price. Alternatively, they can do nothing and enjoy the extra volume of sales that the "resale" market is giving them. Afterall where are the "resellers" getting the handsets...from Du.

To stop selling pre-paid packages is illogical.

Sally 9 years ago

So now because I cant get an iphone in this country, I will be forced to source one elsewhere. How on earth is that going to stop blackmarket sales?

Kenneth Wong 9 years ago

Overpriced mobile subscriptions? In Singapore, Hong Kong, Europe and many parts of the world, the iPhone is sold with a fixed term contract of 12-24 months. Last time I checked, the iPhones sold here are not SIM-locked, and I was not asked to commit to a 12/24-month contract. In fact, it appears that du offers a data incentive with their plans to encourage people to use their network, a carrot rather than a stick approach, wouldn't you agree?

I have looked at various online sources for unlocked/SIM-free iPhone 4, and have not been able to find such phones at the prices that either operator is asking for (AED2849 for a 32GB iPhone 4), once the UAE customs duty of 5% and shipping charges are factored in. Hong Kong is selling unlocked iPhone 4 for AED2600-2700, and once I factored in import duty, Aramex Shop & Ship and the fact that that phone wouldn't be warrantied here, it made more sense to get it here.

Kenneth Wong 9 years ago

It was a huge pain for me to get an iPhone 4 when it first came out because most stores that were selling it at the RRP were out of stock, no thanks to people who were buying them and exporting them out of the country for a quick buck.

With a situation like this, legitimate customers of either operators here are unable to get an iPhone, and frankly, for better or worse, when both operators stopped selling the iPhone on prepaid plans, my friends and I were able to get the iPhones without paying AED4000 for the same phone (yes, with the UAE model numbers!) in the grey market.

Kenneth Wong 9 years ago

iPhones do not have a 'remote-locking option' that disables the phone.