• September 26, 2016
    Last updated 2 minutes ago

technology

Limited supply fails to deter iPhone 7 fans

Apple salesman said that the next shipment of iPhone will arrive on Sunday

By Naushad K. CherrayilStaff Reporter
17:15 September 17, 2016

Dubai: The new iPhone 7 and Apple Watch Series 2 went on sale in the UAE on Saturday morning, one day after the rest of the world. Even though the UAE was listed among the first 28 countries to receive the new smartphones and watches, the launch at the UAE’s two Apple’s stores was delayed a day so the launch wouldn’t fall on a Friday, the day that Muslims traditionally gather to pray.

The two stores in the UAE are the only official Apple stores in the Middle East.

However, the extra day wait didn’t help to walk-in customers get a hold of the new devices. There have been global reports of limited supplies of the new iPhones, especially the new Jet Black coloured phones, which has created excitement for some and frustration for others. The Jet Black model was not displayed at the store. Customers still snapped up the new models, despite some criticism for their similar design to the two previous versions of the iPhone. Customers were limited too two iPhones each.

More than 600 customers queuing up by 6:10am at the Apple store in Mall of the Emirates, but there were just over 500 iPhones in stock. By 11:30am, sales to walk-in customers finished, with only customers who had pre-booked receiving their device.

An Apple salesman said that the next shipment of iPhone will arrive on Sunday, but anyone looking to purchase will have to make an online booking. Other retailers in the country received limited stocks for walk-in customers; most sales for those who pre-ordered.

Ranjit Jose, a UAE-resident hailing from Kerala, along with his girlfriend was the first pre-booked customer at the Apple store to get his hands on the new iPhone and Watch.

“I have always been an Apple fan, right from the first iPhone. The kind of technological leap in every device, including design and the customer experience, made me buy the Apple phones. This is the first time I am coming to an Apple store. I am amazed by the live event and it was a great experience.”

“I took the iPhone 7 gold colour for my girlfriend as 7 Plus jet black was not available. I had also pre-booked a 7 Plus for myself which I hope will get it within three weeks,” he said.

Ahmad Al Hajri, a Saudi national, was the first walk-in customer to get the device. He arrived at the store on Friday at 7pm.

“I slept at the mall. I like Apple and wanted to buy a 5.5-inch iPhone 7 Plus space grey, but had to sacrifice it for the 4.7-inch space grey (256GB).”

Some customers complained that the iPhone 7 Plus with the new jet-black colour were not even available for pre-booked customers. Apple has been cautious on its production plans for the new models despite overproducing last year’s iPhone 6S and later scaled back production.

“Despite knowing that Apple had only limited stocks available, I tried my luck to get my hands on the 7 Plus jet black but in vain,” said Ahmad Khalil, a UAE national.

He said that he will wait for three or four weeks for the new jet black colour. He said he will wait rather than go to grey market, which charges a premium.

“Waiting is worth the money and the excitement it brings,” he said.

The larger iPhone 7 Plus, the model to feature the dual-lens camera, has proven to be a hit with Apple aficionados.

“We are out of stocks as we got only limited stocks to serve just for pre-booked customers and only a handful of walk-in customers. The stocks availability was not that great. Out of the total stocks we got, about 20 per cent was 7 Plus and out of that, a handful of jet black devices,” said Nadeem Khanzadah, head of omnichannel retail at Jumbo Group.

He said the next allotment of supplies is expected by end of this week. Indicators are that the second allotment will be larger than the first slot.

Apple had already cautioned its investors last week by saying that it would not release its sales figures for the iPhone’s opening weekend, as the sales figure is more a reflection of supply than demand.

Industry experts said that Apple is benefiting from its rival Samsung’s recall of the Galaxy Note 7 due to a spate of exploding batteries, but they said that it was unclear if the shortages were the result of strong demand or limited supply.

Ian Fogg, head of mobile analysis at IHS Technology, said that iPhone models with a big exterior design change trigger a large jump in shipments, while the incremental ‘S’ designs have seen lower year-on-year growth rates of around 5 per cent. Apple is relying on the camera, water and dust resistant, and new colours to drive sales.

He said that Apple needs the iPhone 7 to be a major success because it is the main driver of growth for the whole company. Direct revenues for the iPhone represented 57 per cent of total Apple revenue in the second calendar quarter, but the importance of the iPhone for Apple is much greater than direct revenues alone.

“We expect the new iPhone 7 camera design will successfully convince consumers to upgrade their older iPhones, despite the lack of headphone socket,” Fogg said.

He said that sales depend on how the headphone jack removal is received by consumers. Are they prepared to accept the inconvenience, either having to use an adaptor or choose the new AirPods for other devices which have a regular 3.5mm socket? Either way, there is some inconvenience.

Research firms IHS forecast Apple to ship 209 million iPhone units in 2016, which ends in September, while Ovum is expecting it to be 205 million units.

Apple sold 231.2 million iPhones in 2015. Most of the drop in sales have already happened and the next two-quarters will see the rise in sales as the new iPhones will be rolled out in many parts of the world.

The iPhone sales in 2017 are expected to be about 222 million units.

Daniel Gleeson, senior consumer technology analyst at Ovum, said there will be a large cohort of iPhone 6 users looking to upgrade their devices in the next 3 to 12 months. This is what will fuel this turnaround in Apple’s fortunes over the next 12 months.