UAE gets a slice of Apple

A burst of applause roared from inside the Apple Store at Dubai's Mall of the Emirates at around 11am on Tuesday as its employees welcomed members of the media - the first non-Apple staff to enter the place - into one of the tech giant's first stores in the region.
Outside, there were onlookers and passers-by looking on. Sarah, along with her companion, said: "Is it open already?"
Well, today, it officially does, along with the other Apple Store in Abu Dhabi's Yas Mall. Consider this a historic day as the only other time two Apple Stores were opened simultaneously in the same country was in May 19, 2001, when outlets No 1 and 2 were opened at Tysons Corner Centre Mall in Virginia and Glendale Galleria in California.


Since then - counting those here in the UAE - official stores of the world's most valuable company have reached 466. During the company's fourth-quarter results conference call early on Wednesday (Dubai time), Apple said it plans 40 to 50 new or refurbished stores in 2016.
Apple has a huge following anywhere, and the UAE is no different. Consumers in the country tend to show loyalty not just to brands, but also to where they get their stuff.
Key electronics retailers conveyed their thoughts to Khaleej Times, and one sentiment is shared: the opening of the Apple Stores in the UAE is a positive development for everyone.
"The entry of the Apple Stores in the UAE has been much talked about," said Niranjan Gidwani, deputy chief executive officer (CEO) of Eros Group.
"As a retailer, this will have a positive impact as people will be able to experience the brand in a closer way, which will in turn increase interaction with the category and increase sales."
Of course, Apple Stores have their advantages. The company's renowned customer service and Genius Bars are, for starters, some of the come-ons for customers. Others may just want to get the feel of how it would be inside one - and experiencing actually buying from there.
"At the outset, it is highly likely that [our] sales will be impacted as a lot of consumers will visit Apple Stores out of curiosity," Nadeem Khanzadah, head of omnichannel retail at Jumbo Group, said. "However, over time, Apple Stores will attract their own loyal customers, while [we] will have our own."
Khaleej Times conducted a poll on its website, asking readers if they would buy their next Apple products at Apple Stores; 64 per cent said they would, with the rest at other retailers.
There is one truism about UAE electronics retailers: they specialise in special offers. Not that Apple doesn't have - or may not have - these; it's just that consumers always look for the best bargains, whether it be in the form of discounts or freebies being dished out.
"In terms of customer base, in the long run, Apple will have their own, while we will continue having our own," Emax chief executive Neelesh Bhatnagar said.
"We are not expecting these new stores to hurt our sales in any way."
Added Gidwani: "Some of the retailers here in the UAE have been in business for decades and have a strong loyalty base."
This, of course, is not limited to physical shops.
"I think there will be a shift [in customer preferences]; it's only natural that consumers would navigate to the brand's own store," said Omar Kassim, founder and CEO of online marketplace JadoPado.com.
"However, depending on Apple's direct pricing strategy in the region - which so far has been differentiated to other markets - this may continue to result in a price differential that will allow both wholesalers and other retailers to continue to offer Apple products to more price-sensitive customers."
And speaking of pricing, while costs at other retailers are slightly higher compared to Apple's official quoted prices in the United States, these industry executives have different takes on it.
Khanzadah says that Jumbo currently has no indication from Apple on price changes, while Bhatnagar points out Emax's contract with Apple won't be affected.
Kassim, on the other hand, says it's "very hard to say", but he personally thinks there will be adjustments in the medium-to-longer term, "should Apple decide on more price parity with US retail pricing".
Gidwani, meanwhile, was more direct to the point.
"I believe with its official entry into the UAE, Apple might have to review its pricing to meet the demands of local consumers and keep them satisfied," he stressed.
alvin@khaleejtimes.com