iPhone 16 in UAE: Some resellers lose over Dh200,000 after hoarding Apple devices

Influx of international stock led to an oversupply in the market, wiping out any chance of turning a profit

SM Ayaz Zakir

Published: Fri 27 Sep 2024, 6:00 AM

Last updated: Wed 2 Oct 2024, 6:40 PM

The launch of the iPhones sparks a surge of excitement among resellers and buyers in the UAE, hoping to cash in on the latest Apple release every year. However, with the launch of the iPhone 16, some lucky resellers walked away with profits, while others found themselves grappling with massive financial losses, with some losing as much as Dh200,000.

Every year, the release of a new iPhone model becomes an opportunity for many UAE residents to make quick bucks by reselling the devices at a premium. The latest launch of the iPhone 16 on September 20 was no exception, as buyers who pre-booked the device online flocked to Apple stores to pick up their phones. The first lucky recipients sold their phones to eager resellers, marking up the price by Dh2,500 on launch day.

The resellers, hoping to capitalise on the opportunity, then tried to sell the phones at an even higher premium. They expected to sell the device at an additional Dh3,000, which would leave them with a profit margin of around Dh500 on each sale.

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However, things took an unexpected turn this year. Many resellers who purchased iPhones from residents who pre-booked the devices, anticipating high demand, found themselves in a tough spot when supply flooded the market and prices dropped significantly within days.

Reseller's struggle: Dh200,000 loss

JA, an electronics dealer in Dubai, described how he and his team had positioned themselves to make a fortune from the iPhone 16 launch. “We bought nearly 80 phones on the first day from people who had pre-booked their devices. We stationed employees at malls in Dubai and Abu Dhabi, and we were paying a premium of Dh2,000 for each Pro Max model,” said JA.

Initially, the strategy seemed to work. “On the first day, we made some profit on a few devices. We already had bookings, and our clients had paid an advance of Dh100 to Dh500 even before the launch. But they didn’t come to pick them up on the first day as expected,” said JA.

“Since our clients weren’t collecting their devices, we tried to sell them with a lesser profit margin of Dh100 to Dh300 on the first day, as the demand suddenly shot down and we managed to sell only 20 units. Hoping that demand would increase, we decided to stock the phones and sell them on the following days,” added JA.

However, things went downhill from there. JA and his team had paid a total premium of over Dh160,000 for the 80 phones, and the situation worsened as more devices flooded the market. “On the second day, my employees bought another 57 devices, paying a premium of Dh800 to Dh1,000 per phone,” said JA. “We expected demand to increase, as it usually does in the first few days after the launch. But the shocking part was that people weren’t coming to buy them. Even the clients who had paid advances backed out.”

Phones from elsewhere flood the market

The third day of the launch brought the biggest blow to resellers' business in the UAE. “Thousands of devices from Hong Kong, Singapore, the US, Japan, and other countries flooded the UAE market, and suddenly, the demand was gone,” said Altaf (name changed), another electronics dealer in Dubai. “The iPhone 16 Pro Max models from abroad were available at below retail price everywhere, with no need to pay any premium,” said the dealer.

Facing a stockpile of unsold iPhones and with the market saturated, JA revealed that his business is now facing losses of nearly Dh200,000. “We couldn’t make any profit. We are still stuck with these phones and it’s becoming nearly impossible to sell them by keeping profit,” said JA.

“I lost around Dh100,000 by purchasing the phones at a premium, hoping to sell them at a higher price later,” said MP, another reseller. “But the market became flooded with phones from other countries, and there was no more demand.”

Like many others, MP based his investment on past successes. “Last year, I made a profit of Dh70,000 on the iPhone 15 models in just 10 days. Many resellers made profits over the years, and in previous years, demand extended well beyond November,” said MP. “We expected the same trend this year and stocked up on the iPhone 16 Pro Max.”

Unfortunately, the influx of international stock led to an oversupply in the market, wiping out any chance of turning a profit. “It’s tough this year. The market didn’t react the way it did in previous launches,” said MP.

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