Grey market mobile phone sales in the Middle East to decline



Middle East sales of counterfeit and "grey market" mobile phones is set to decline once again this year to 38.2 million units.

The region is the world's second-largest grey handset market behind the Asia-Pacific according to research firm IHS. Worldwide shipments are set to drop by 12 per cent this year to 194.6 million units. "The market for counterfeits will continue to decline given the fact that the starting price for smartphones has continued to drop," says Ashish Panjabi, the chief operating officer at Jacky's Electronics.

"Today established brands like Samsung have smartphones priced at Dh299.

"There are a whole host of brands that also manufacture Android-based phones at even more competitive prices whether they be brands from China, India or even some local OEM brands such as Touchmate and Prestegio," he says.

According to retailers, the local grey market thrives when there is a shortage in supply, delayed product launches or a large disparity between the price of a device in the UAE and overseas markets. "What we've seen in the last couple of years has been an increased focus given to the region in general to address most of these issues," says Mr Panjabi.

"During various periods of this year we've seen the price of both the Samsung Galaxy S4 and the Apple iPhone 5 in the official market drop below that of the grey market because pricing adjustments have happened here possibly quicker than other parts of the world."

Delayed launches for Apple products especially pushed prices up to double or triple the recommended retail price on the grey market in the UAE. Now manufacturers are increasingly giving precedence to the region, consumers no longer need to wait months before handsets arrive here, helping to minimise grey-market demand. A fall in demand for lower-end feature phones is also driving down the grey market, which IHS believes will fall further next year to 173.8 million units worldwide.

"A combination of supply and demand factors is causing demand to decline for grey market cellphones," says Kevin Wang,the director of China research at IHS. "On the demand side, the consumers in emerging markets who used to be the majorbuyers of grey market cellphones increasingly are preferring brand-name handsets," he says.

"On the supply side some grey market handset makers have become branded manufacturers in order to promote their own names in developing countries."

States of Passion by Nihad Sirees,
Pushkin Press

Dubai Bling season three

Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed 

Rating: 1/5

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%3Cp%3ETotal%20trade%20in%20goods%20and%20services%20(exports%20plus%20imports)%20between%20the%20UK%20and%20the%20UAE%20in%202022%20was%20%C2%A321.6%20billion%20(Dh98%20billion).%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3C%2Fp%3E%0A%3Cp%3EThis%20is%20an%20increase%20of%2063.0%20per%20cent%20or%20%C2%A38.3%20billion%20in%20current%20prices%20from%20the%20four%20quarters%20to%20the%20end%20of%202021.%3C%2Fp%3E%0A%3Cp%3E%C2%A0%3C%2Fp%3E%0A%3Cp%3EThe%20UAE%20was%20the%20UK%E2%80%99s%2019th%20largest%20trading%20partner%20in%20the%20four%20quarters%20to%20the%20end%20of%20Q4%202022%20accounting%20for%201.3%20per%20cent%20of%20total%20UK%20trade.%3C%2Fp%3E%0A

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Disclaimer

Director: Alfonso Cuaron 

Stars: Cate Blanchett, Kevin Kline, Lesley Manville 

Rating: 4/5

COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.

When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.

How to get there: Emirates currently flies from Dubai to Orlando five times a week.
'Nope'
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The Vines - In Miracle Land
Two stars

Key facilities
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  • Premier League-standard football pitch
  • 400m Olympic running track
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  • 600-seat auditorium
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  • An elevated football field that doubles as a helipad
  • Specialist robotics and science laboratories
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  • Disruption Lab and Research Centre for developing entrepreneurial skills