Nestled comfortably in the lap of the turquoise blue waters of the Eastern Mediterianin sea, the town of Tripoli in Northern Lebanon reminiscences a shadow of its glorious past dating back to the days of the Phoenicians. Even being the second largest city of Lebanon, it depicts a character of a small town where most people still know each other by their first name. Its Arabic name Al Fahya means the diffusion of a sweet scent, something that evokes feelings of a romantic character straight out of a medieval classic. Its people are known for their traits of simplicity, consider a handshake as a binding contract and one’s word to be enough for a definitive action. Ghassan Bendali is a true citizen of this glorious city being a proud son who has ensured to instill these characters in the roots of his organization. My conversation with Ghassan shuttled between technology, the future and most of all the brand Apple; a brand that owes part of its success in the Middle East Region due to its partnership with the MIDIS Group, the parent company of ABM. We met in his office in Dubai surrounded by Apple devices so let’s delve right into our discussion.
Najib: Good afternoon and many thanks for your time Ghassan.
Ghassan: You’re welcome and its a pleasure to have you here in our office.
Najib: Please take us through your early career and transitions.
Ghassan: Well I am a Computer Science Graduate from the Lebanese American University in Beirut. I had the love of technology from my early days and computer science was a natural extension of that.
Najib: Computer Programmer to a business Manager? Seriously, the coding guys are known to be a bit nerdy, how did you transition into mainstream business?
Ghassan: I did start my career working as a programmer in 1992 but as luck would have it, this turned out to be the worst economic year of the decade. The Lebanese Pound crashed against the dollar and we had the lowest devaluation of our currency. Every time I received my salary the value would depreciate in absolute terms by 20%, the inflation had been staggering. This was a time when the panic button was activated.
Najib: 20%, this is a catastrophe, what did you do to alleviate this situation?
Ghassan: This time could be described as a Lebanese diaspora and I also decided to travel and joined ABM in Dubai exactly 25 years ago in the pre-sales division for the Education Sector for Apple devices. These were the days of Apple being a niche and a small player in the market. ABM was also mid to small sized organization. There weren’t any fancy iPhones or mass market products available. We used to sell Mac’s, Printers, Monitors etc. These were magical days of working with products that were even at that time decades ahead of its competition.
Najib: Introduce us to some products from those days.
Ghassan: My all time favorite that I still cherish is the Quick Take 150; this was the world’s first digital camera and was an absolute novel concept. It could snap 16 photos with a whopping resolution of 640X480 Pixels and be used in Mac OS applications. I vividly remember that during GITEX in those days, His Excellency Sheikh Maktoum had visited the ABM stall and we had his picture snapped and delivered to him printed on an Apple printer before he left, he had loved it. We worked with the Software Suite QuickTime VR and you could produce a 360-degree view by stitching still images together. Can you believe we were working on VR even during those days?
Najib: Amazing stuff Ghassan, would you recall some of your key customers from those days?
Ghassan: This had been a special time for me, literally at a right time at a right place. My top client had been the American School in Dubai, we also did a lot of work with the Higher Colleges of Technology and the American University of Sharjah before it even opened its doorsteps the students. We had a major share of the printing and publishing business with Motivate Publishing, Khaleej Times and Gulf News to name a few key customers.
Najib: What came next from Apple?
Ghassan: Apple always had a major focus on the education sector worldwide and for some reason, the old team members from ABM started to leave the company. I took over more tasks as I had a desire to learn, I was at that time more of a Product Manager for the whole portfolio of Apple in addition to the ongoing responsibility of the Education Sector. This was a time when I added “Multi Media” experience within my portfolio, that was a buzz word at the time and that turned out to be a boon for the company as a whole. I started handling this new division for direct sales for the company.
Najib: Please tell us something more, this is getting very interesting?
Ghassan: The actual breakthrough happened with the “Final Cut Pro”, the movie and multimedia suite, where Apple brought the Desktop”Linear Editing” to the common person, it was an easy to use and affordable platform for people to edit movies. The Suite was installed in the Mac Pro Tower and it helped a lot of people to take on jobs as freelance movie editors. Several Universities started to base their curriculums around the “Final Cut Pro” and when the students of these institutions graduated and joined the media groups they ensured that the same was installed at their workplaces; in my opinion, the revolution at Apple had begun.
The 3rd Era
Najib: A revolution? Did you start to see the Steve Jobs effect?
Ghassan: Yes, things had started to get really interesting at this stage. The new Powerbook, Macbook Pro, iBook etc. started appearing and a healthy change came into the product lineup. This was also the time when we carried out our very first test in the retail sector. iMac’s started shipping with only the USB port, although this technology was introduced two years earlier but other manufacturers were still using the RS232 port. Earlier, Mac accessories were hard to find and used to be available at selected outlets. At this stage, the accessory manufacturers saw the immense potential of this business and started shipping Mice, Speakers, Keyboards etc with the USB port. This was now a new standard and Apple was among the first to see the potential in USB.
Najib: Which product was your breakthrough in the retail?
Ghassan: It was the iMac with the introduction of the color range, the transparent monitor with hues like Graphite, Green, and Orange became a fashion statement and Apple started to reign supreme.
Najib: How about the change in operating systems?
Ghassan: With the advent of UNIX, Max OS-X was launched with the 10.0 version. Apple brought in a modern and secure operating system for the end users as compared to Windows. It became very famous for institutions and individuals who wanted security and safety plus an ease of use. Initially, the OS-X was not Arabized but at a later stage, we started receiving it with the localized version. At ABM we used to work hand in hand with Apple to Arabize the operating system. At this stage I was overseeing the day to day running of the company operations by being appointed as the deputy GM, I was also managing everything to do with presales.
Najib: A few words regarding the MIDIS group please:
Ghassan: The group is privately held and its one of the largest IT companies in the MEA region. MIDIS is a cash-rich company with sales of 4.5 Billion US$ and an employee strength of 4500 professionals across 120 group companies spread in the Middle East, Africa, and Central Europe. The company Headquarter is in Beirut, Lebanon.
Najib: Now let’s delve a bit more into Apple and ABM relationship?
Ghassan: The relationship with Apple had started before 1986 at a time when we were a muti-vendor company, we used to sell Apple 2’s and other complementary products. Apple Europe came up with the concept of “IMC (Independent Marketing Company)” to cover the geographical areas where they didn’t have their presence by appointing partners. This is when ABM was created as an Apple IMC and we were the Value Added Distributors appointed for the region. ABM has historically been an Apple associated company, we did some complementary products like accessories that added value to the Apple portfolio. We never had any competing brand within our portfolio. At ABM we cover the GCC, Levant, Iraq and Egypt markets.
Najib: Did ABM consider splitting the relationship with Apple during the downturn of 1990’s?
Ghassan: This is a tricky question Najib. There is always a possibility of a supplier losing its ground like Nokia and Blackberry and having a dependency on one brand is always risky. However, Apple is a strong and an extremely innovative organization and we do not see any downturn with them in the coming future. Unlike the brands you’ve mentioned, Apple is innovating and is always at the forefront and cutting edge of technology, this is where the future stands today. As ABM the reason we have been around for so long is because we did a great job. Whenever a weakening came into the system we tried and successfully implemented a remedy and Apple had appreciated this all along. In the case of several other organizations, they tend to jump ship at the slightest signs of weakness by the brand and we did not keep this option with us at all. Like any other Principal, Apple has the power to look for options but if we provide the expected share, coverage and customer services then we will be covered by them, and history has shown this.
Najib: You spoke about the transition of ABM into retail, what had been the tipping point for you to get into this vertical?
Ghassan: iPod was launched by Apple and we did not foresee and forecasted the demand as it happened, I guess it took a while for everyone to be mesmerized by Steve Job’s foresight. After all the iPod was just an MP3 player and what else. It was launched at a 500$ price tag and we initially addressed it to our institutional channels, forecasting a few hundred pieces. Later we realized that this was a completely different beast and had to be addressed to the retailers, our current sales channel was inadequate for this product and ABM had to literally reinvent itself for this new line of business.
Najib: We are getting in the flow Ghassan, so how did you get there?
Ghassan: We had ventured into retail initially with CompuMe with the iMac’s but the offtake had been slow. With the advent of the iPod, we understood the importance of carrying all the models and let the customer choose from the shelf whatever they desired, as opposed to our classic way of letting our resellers pick and choose whatever they thought best. We then went to Jumbo Electronics and Virgin Megastores, both of whom had a strong affinity with the Music Industry and saw a serious sales spike and trust me it was much bigger than we had ever anticipated. This was the time that we got excited by the retail and introduced the Mac lineup and saw the acceptability of the Apple IT products from a wide range of consumers. We also appointed various sales channels and experimented with a huge success the pleasures of retail. The floodgates of the gray market opened up as well by the way. That is always a sign of a successful product and we had to just manage this new challenge.
Najib: Please relate to us the iPhone story that our readers are keen to hear about from your perspective in the Middle East Region.
Ghassan: iPhone was first introduced in the US with AT&T, customers in the middle east used to receive some units sporadically but these units had to be jailbroken to be used, which is obviously not the way these devices was intended to be used at all. trust me it was heart-wrenching to see that we couldn’t sell this product. Subsequent releases started to go to the biggest European countries, Canada and Japan, Germany, UK, etc.. but still only through the operators. Can you imagine standing on the line watching someone having a delicious chocolate ice cream and you aren’t allowed to taste it? Finally, iPhone 5 was released in the UAE with Etisalat. I vividly remember standing in a long queue to get my hands on the device at the Etisalat Deira outlet. The product was sold directly to Etisalat without our involvement. The product was then launched with the carriers in Saudi Arabia, Qatar, Kuwait and Bahrain where operator consortia had operated. At this stage, the iPhone was still being sold only through the operators.
Najib: The excitement is building so when did Apple finally open the channel through distribution?
Ghassan: Apple finally decided to open the iPhone for the distributors with the launch of the legendary 5s. The excitement at ABM had been unprecedented and was one of the best memories I have that I would always cherish. We had learned the ropes of retail distribution through the iPod and ipad and we hadn’t slacked a bit to put the resources in place by the time the prized iPhone 5s was launched. We understood very well that if 10 units are good for the iMac, 50 for iPod, 100 for iPad then we had to get ourselves ready for a multiple of 1000 for the iPhone. We were ready financially and in terms of the channel by the time the product was ready for the market.
Najib: Wow this is a great story for our readers, what’s your opinion for success for the Apple brand?
Ghassan: For a very long time Apple was always an under appreciated brand but I had always admired Apple as an organization that did not compromise on excellence. It had been an enigma to me why people could not see the greatness of this brand. In my opinion, the major ability of Apple is their capability from a blank slate to a product is unparalleled. Let me give you an example, I have been an enthusiast of smartphones from their inception. I had started off with the Nokia 9000 Communicator and then mature products started to come into the market. Digital assistants got embedded with a phone churning new products with services like the Handspring. There was then the introduction of Stylus in the Smartphones and all manufacturers including Sony and Nokia started experimenting with it, the reason for using the stylus was that the screen was not sensitive enough. This is where the intuition and imagination of Steve Jobs that was par excellent came into play. The first Smartphone without the stylus was iPhone, Apple simply improved the touch technology and even with an immense criticism they changed the paradigm and created a new reference in the market. Simplicity and Common Sense, this is what makes Apple great.
Najib: ABM operates Retail and Distribution Business, how does the model work?
Ghassan: We have separate entities managing our businesses. In Saudi Arabia we have Arab Computers, UAE is managed by ABM, rest of the Middle East comes under ABM FZE. In addition to this ABM Care is also an independent entity handling the after sales warranty. All these verticals have been created to have a laser focus and concentrate independently on our businesses. At ABM we are focused and do not believe in a scattered approach towards business management. We measure the performance of each entity separately. We now have a local presence in Egypt, Qatar, Kuwait and Jordan with an in-country approach. All these markets are carrying local stock catering directly to the needs of the local customers. It is our strategy and focuses on reaching as many customers and markets as possible. Our retail chain iStyle is a separate entity reporting directly to the MIDIS group.
Najib: Great approach Ghassan, please let me know who is your ultimate customer? Is it your sub-distributor or the end user?
Ghassan: “ABM is singularly focused on the consumer experience”, our core focus is towards the success of just one company and that is Apple. We are a client centric organization and that is why we have started to focus overwhelmingly on Retail. If you have noticed then we do not have subdistribution on Macs. The reason we have subdistribution on iPhones is because we cannot reach all our customers yet. I personally would like to reduce the layers as much as possible and if it were to me I would go to every country myself and address the needs of the end users.
Najib: Innovation in terms of feature set and design has been stagnant in the mobile industry, do you think we have reached the end of the road in these products or there is a room for improvement?
Ghassan: There is still a lot of room for improvement, this industry has reached a certain level of maturity for sure. However, on a cautious side, this vertical has to either re-invent itself or to be replaced in the near future, we should expect new things sooner and not later. Once the fad in mobiles used to be a small size and then the smartphone shattered it, let’s see what comes next. I do not know what the future will bring, but I have great trust in the Apple innovative drive and reactivity, and I am pretty sure it will not disappoint us.
Najib: Who would you consider your main competitor when monitoring the Smartphone landscape?
Ghassan: Even though I truly consider Apple products are a class of their own, I am keeping a keen eye on the Chinese players especially in the emerging markets, these are the markets of the future. Huawei is playing at the premium end in these territories especially in countries like Pakistan and Algeria and this is where the real concern lies. Africa is definitely the next big market and the Chinese are very strong there and have a physical presence for some time understanding the channels and customer requirements.
Najib: Which market has been a key challenge to you to penetrate?
Ghassan: The biggest challenge to us has been Iraq, the country offers very little to the nonexistent consumer experience. Organized retail is very small leading an influx of gray from all over the world, the problem I have is that we cannot have a lot of value that we can add there, that is not eroded by the price difference.
Najib: Gray market for Apple has been a serious challenge, what is your take on this continuous problem?
Ghassan: Gray is good news actually, it’s not black or white. There are also some advantages as it checks the prices and controls the official distributors to avoid greed and perform well. It is also a measure of success for the brands. On the other hand, it’s also destructive as we are not aware of what the consumers are buying. Products come with different plugs and chargers with specifications totally different to our region, we have had instances of these products getting damaged. With Apple preponing the launch dates in the Middle East the effect of gray is being reduced. However, call it a menace or a necessary evil but the gray is here to stay.
Najib: With International Warranty in place what advantages are there for Arabic variants as compared to International?
Ghassan: Arabic product has been created for this market and tested on the network of each carrier. I can vouch for every unit that I sell, however, we do not know the sources of the gray, and exactly it reached our market. The decision to service the gray market was to ensure that the consumers do not suffer but I repeat that this is not in the interest of the consumers purchase a product from another region. The good news is that a lot of our customers recognize this value and hence they are purchasing the product.
Najib: This is a great observation Ghassan, are you monitoring the sudden influx of used mobiles in the market?
Ghassan: Yes are keenly observing it but at this stage, I do not want to comment on this.
Najib: The Used market is primarily bringing in iPhones, do you think that there should be a provision for an extended warranty for these products?
Ghassan: Well I am trying to avoid this topic but if you insist then by default a consumer should receive a warranty. For used phones, it is really difficult to understand the methodology to be implemented and rigid regulations should be in place by the authorities to control this business for the benefit of the end users.
Najib: What are your key market challenges at the moment considering the tightening of facilities from financial institutions and from credit insurance firms for the IT / Telecom Sector?
Ghassan: Cash flow is having a serious impact on the business especially with the resellers, Insurance companies are also reviewing the credit lines. The players who are in touch with the end users would last and the cowboy back to back operators would disappear.
Najib: Which companies are your favorite in terms of innovation and design?
Ghassan: I am a big fan of Tesla, Amazon, Netflix and my all-time favorite Apple.
Najib: Which are your top 3 markets?
Ghassan: It’s Saudi Arabia, UAE and Kuwait / Qatar.
Najib: Professionally what would you advise your 25-year-old self?
Ghassan: Take care of Retail, Retail, and Retail.
Najib: Some last thoughts about Dubai, a city you’ve spent 25 wonderful years?
Ghassan: Every country and city have its ups and downs. Dubai is and has been resilient for many reasons. This is a country with a vision and thrives on innovation and avenues for the betterment of its citizens. With a focus like this, the only way for a country is up.
I really appreciate your time Najib and look forward to more interesting conversations in the future.
Here’s Ghassan Bendali: