Lower cost smartphones make a dent on UAE market

One of the most popular affordable brands has proven to be the OnePlus One from the Shenzhen-based company OnePlus.

The OnePlus One phone offers high specifications for just US$299. Courtesy OnePlus One
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A sea change is coming to the country’s smartphone market – but the iPhone 6 is not the force beneath this tide.

In recent months cheaper high-end smartphones have begun to gain traction in the UAE. There has been a large influx of new smartphone brands and one of the most popular has proven to be the OnePlus One from the Shenzhen-based company OnePlus.

The phone offers high specifications for just US$299. It is selling so well around the world that it is more difficult for consumers to get their hands on one than on a new iPhone.

A review on the website techradar.com gave the phone four and a half out of five stars and said: “The OnePlus One offers Samsung Galaxy S5 performance for less than half the price. If that doesn’t make it attractive it also has a customisable OS and a 1080p display. There are a few downsides, but overall the OnePlus One is amazing value for money.”

The national smartphone market is currently is led by Samsung with its S range of phones. Apple is a strong second while the likes of HTC, Sony, Nokia all vie for the coveted third position spot. But bubbling up from beneath are the Chinese upstarts such as OnePlus, Huawei and Lenovo.

“I think it is those new low cost smartphones that will change the market dynamics significantly – not Apple iPhone 6 or 6 Plus,” said Nabila Popal, research manager at International Data Corp in Dubai.

“The introduction of the Apple phones will not cause any vendors, including Apple, to shift from one group to another or change ranking – thus not a major impact to the market dynamics,” said Ms Popal. “The only impact it will have will be in Apple’s market share, as it will win over high-end consumers who desired a larger screen size and until now only had Samsung or top end other vendor devices to chose from.”

According to the Telecommunications Regulatory Authority (TRA) about 52 per cent of handsets in the UAE are smartphones, of which the iPhone 5 is the most popular handset with 2.8 per cent share followed by Samsung's SIII with 2.7 per cent. Overall, Nokia continues to dominate the handset market in the UAE with 50.2 per cent, followed by Samsung with 19.3 per cent and Apple with 9.1 per cent.

Still, many retailers were pleased with how the new iPhones have performed in their first month on the market.

The September 9 launch of the new phones was highly anticipated. Apple fans waited impatiently until the iPhone 6 and 6 Plus went on sale. The two devices sold 10 million units in the first three days around the world and demand for both show no signs of letting up in the UAE.

The iPhone 6 arrived in the Emirates with a recommended retail price of Dh2,599, but was fetching about Dh4,500 at grey market retailers.

The iPhone 6 plus, which is bigger, had a recommended price of Dh2,999 but was going for as much as Dh6,599.

Stocks of the new iPhones have been running low, with major retailers all selling out as new stocks come in.

“It has been selling very well, but the fact is there is limited availability so there is a shortage of stock at the moment,” said Nadeem Khanzadah, head of retail at Jumbo Electronics. “Whatever comes in is sold off immediately.”

Last week, du responded to high demand for the devices with a statement promising consumers that it has “provisioned a sufficient quantity... The availability of models may vary from one shop to the other, but this is constantly being monitored and stock is being replenished as necessary”.

The larger screen size of the 6 Plus has piqued the interest of many Nokia and BlackBerry users said Mr Khanzadah, who believes that the two phones may disrupt the smartphone market quite substantially. Others are more cautious and are waiting for the launch of Samsung's Note 4 mid-October to gauge the shape of the market.

“We’ve seen very strong sales so far versus other devices,” said Omar Kassim, co-founder of the retail website JadoPado. “I don’t think the iPhone 6 is in the ‘right’ price range to disrupt the entire UAE smartphone market, but it’s definitely making a big dent on the top end. While it’s too early to say, if this continues into the holiday season, it looks like the iPhone 6 will be a clear winner in this round.”

thamid@thenational.ae

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