It’s always fun to spend time with my friend and ex-colleague Elias Atallah, no matter what the subject, it invariably slips to a discussion about Mobile Phones and then we have this long tirade that juggles between a difference of opinion to a debate regarding the future of trading and the brands. Please join us and enjoy our last chat.
Introduction by Elias:
Thank you for this chat, I’m really excited to be here. I’ve recently completed my 10th anniversary in Dubai, UAE. It was an amazing decade where I undertook exciting roles and met some really great people. I’m of Lebanese-Palestinian origins and started my professional career in retail in March 2000. In 2007, I moved to Dubai and joined MAF (Majid Al Futtaim Group) Retail where I spent 5 valuable years. MAF is among the best companies to work for in the UAE and I had been lucky to be part of their team. I then joined Metra Computers as Apple Product & Distribution Manager in 2012, the company is one of the Key IT Distributors in the region UAE & KSA. I was part of a team that was instrumental in developing these markets. In 2012, I joined Almasa Holding as a Product Manager for Mobility Division with a prime focus again on Apple Products. Almasa is a diversified group managing Distribution, Services, and Property Development. In Almasa, I focused on Iraq market development, our Retail Division and Service Centre. Today, Almasa is a well recognized warranty provided for Apple Devices in Iraq and customers trust us. I visit Kurdistan regularly and have developed a special affinity for the country and its culture. I also played a role in developing and expanding our Service Center across Kurdistan and the South of Iraq.
Najib: Hey Elias let’s get right into our favorite topic and talk mobiles?
Elias: Thanks, Najib, good to be back to our mojo, let me summarize this for the benefit of our readers. As you know smartphones have become an extension of us, its almost as if its a part of the body that we can’t do without. AMobile phone purchase is always an emotional decision and now these devices have become a major revenue generator for most manufacturers. Major trading brands that come to mind are Apple, Samsung, and Huawei. The new Google Pixel device, as well as latest Motorola products, are also getting traction but overall the market is becoming quite cluttered and complicated. Najib, it seems we need to get ourselves another topic soon as this business is losing steam.
Najib: Well not yet Elias, I think we still have a couple of years to wait and see if anything new comes in. Tell me about Mobile business in the territories you are working in?
Elias: I have an expertise working with partners in the GCC, Levant, and Iraq. In general, these markets are dominated by Apple, Samsung, and Huawei. Customers in this region are still “Brand Oriented” and iOS and Android customers have defined a clear path of choice regarding their devices and brands of choice. Iraq has recently seen an upsurge in the “Used Phones” business and recently OEM’s from China are all freely available across the country.
Najib: Let’s talk Apple!
Elias: This is my absolute favorite brand since 2012 and I use almost every gadget from Apple. I have an iMac, Macbook, 2 Ipads, 4 iPhones and 2 Apple TV’s. I am virtually in love with this great brand as I’ve been working as an Apple Product Manager in two different organizations. Today iPhone is the best option for cash and the traders know that this is a commodity that would help them turn their capital as quickly as possible. It is really rare to see any trader who hasn’t dealt with Apple products especially the iPhone. There are iPhones now flying around from all over the world and multiple variants (Flavours) are available in the market.
Najib: What different Variants (Flavours) are available today in your markets?
Elias: The Dominant variant in the region is “The Middle East” Arabic, it comes with and without Facetime (Facetime is Apple specific Social Software). US Variant is highly demanded in some specific countries that would not accept any other flavor. The influx of Euro / UK variants become quite significant as for and when there is a fluctuation in currency, Far East / Singapore / Japanese /Australian Variants are not that popular primarily due to the charging plugs. Independent Retailers in the region have specific demands and these are fulfilled by the traders.
Najib: How about warranty?
Elias: I also manage the Apple Authorized Service Center for Almasa in Iraq. Apple products enjoy International warranty except for selected variants and everything other than that is serviceable. Depending on the region, Apple would swap or repair specific parts, minor repairs such as Camera, Battery, Home Button etc can be repaired now. The beauty of Apple is that customers can walk into any Service Center across the world and get their products repaired, a truly customer focused company.
Najib: How do Distributors manage if there is a lot of Influx of Gray Products for all Brands?
Elias: It is not that gloomy to tell you the truth, traders play in their own scope. Power Retailers still contribute to the majority sales targeting the end users and this is all managed through the proper channel. Gray market is felt more once you move away from the UAE market. In Iraq, the market has been dominated by gray products for various reasons ranging from currency manipulation to the unavailability of the organized channel. End users in markets like Iraq demand genuine products but trading is so strong that it is difficult for an official distributor for any brand to operate smoothly.
Najib: Why then is Gray business is controlled well in the UAE while DAFZA is the hub of trading for the Middle East?
Elias: Regional Head Quarters and their various Divisions are based in Dubai. Country regulations are necessitating the traders & KDR’s to sell TRA approved stock. If caught selling non-approved stock then these traders are subjected to major penalties resulting in a customer centric approach from the Government.
Najib: This is quite interesting but you as a Distributor or a Trader can make money out of Mobile Business today?
Elias: You can still make money but it is no more a golden goose that it used to be once upon a time. Mobility is not really a trade to make money anymore in my opinion but has been a cash engine for other businesses for some companies.
Najib: How is the situation of the IT market?
Elias: Degrowth is less now as compared to last year and expectations are quite realistic finally. Companies are not after the crazy run of market shares anymore, eventually, Mobility would also move into this direction. The bad eggs have disappeared from the IT market cleaning the space for proper business.
Najib: How’s the situation of Banking facilities and Credit Insurance?
Elias: Nowadays genuine players with own capital are emerging as Financial Institutions have become selective and realistic for the ICT Sector. The same stands true for Credit Insurance companies, they had suffered serious losses during the last couple of years.
Najib: What would you advise Mobility Traders and Distributors today?
Elias: Do not put all your eggs in one basket, play with multiple brands and concentrate on used devices as well. Create your own network and focus on developing a structured rather than the usual cowboy approach.
Najib: What in your opinion would be the next big thing?
Elias: VR and AR Centric products would make a strong entry into the market soon. 3D printing is also expected to do great as well as soon as the printing material becomes economical.
Najib: A few last thoughts and words on the current market situation?
Elias: Interesting times in the trading market as things are rapidly changing and we are today a part of that change. I really hope that no one is left behind during this process as change is always painful. Customers and Products are changing and so is the mode of communication. Company structures and financials are on the move and with all these combines factors it would be a brand new market soon. So this is no time to walk but to rather RUN.
Najib: Elias, many thanks for your time and comments and I am sure that our readers would be glad to receive this valuable information.
Elias: Pleasure is all mine, hopefully, we will have our next talk soon and this time we will focus on gaming and the future trends of this business.
Kazi Najib Ashraf is a Dubai based IT Professional and a Blogger. He runs a Private Consulting firm focusing called Playtorium focusing on Business Re-Engineering and Market Development in the ICT Sector. He can be contacted at firstname.lastname@example.org.