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ITWeb Africa

Sunday, Jan 19th

'SA grey market for iPads, iPhones diminishing'

SA grey market for iPads diminishing.

Sales of electronics such as the iPad and even the iPhone by unauthorised distributors and resellers are diminishing in one of Apple’s most important African markets South Africa, according to a technology analyst.

Last night, Apple unveiled its iPhone 5 and latest iPod, in what has been the most anticipated technology product launches of the year.

The iPhone 5, in particular, sports a thinner form factor, a bigger screen, a faster processor in the A6 chip and an ability to work on 4G mobile networks.

However, the product is to be launched in Apple’s tier one markets such as the US, Japan and UK on 21 September, while customers in the rest of the world are going to have to wait until later in the year to get their hands on the gadget.

And some consumers in these ‘fringe’ countries, such as the oil rich United Arab Emirates (UAE), are willing to pay top dollar to get their hands on Apple’s latest product at the same time as those in markets such as the US.

A report on UAE daily newspaper 7DAYS says that unofficial Apple resellers are planning to sell the iPhone 5 for over $2700 just after it launches in the US. In the US, the same product is set to retail in the US for $199.

The UAE is renowned for its rampant ‘grey market’ regarding Apple products, where unauthorised distributors and resellers take advantage of super-wealthy consumers desperate to get their hands on the latest tech gadgets as soon as possible.

But in South Africa the situation is very different owing to Apple’s official distributor Core Group - which distributes iPads, iPods and iMacs in SA - getting the tech giant’s products into the country quickly, says technology analyst Arthur Goldstuck.

Rutger-Jan van Spaandonk, the executive director of Core Group, has confirmed to ITWeb Africa that his firm has managed to get the last two iPad products into the country within 5 weeks of announcements being made regarding their availability in SA.

South Africa also has legislation in the form of the Consumer Protection Act that aims to warn consumers on the dangers of buying grey market goods, which could have dodgy warranties.

“The grey market is becoming ever-smaller, thanks to more widespread availability of products at prices that are very close Rand equivalents to their dollar prices,” Arthur Goldstuck tells ITWeb Africa.

“There are exceptions, but the iPad grey market in particular was killed off when the Core Group announced South African pricing that was better than in many European countries,” he adds.

Goldstuck says that he does not have exact figures on how the grey market for electronics such as the iPad has diminished in South Africa.

Although, he says that South African electronics retailers such as Hi-Fi Corporation, which used to be regarded as one of "the hubs of grey products…has formalised its supplier relations with major vendors, reinvented its image, and not losing sales to any great degree."

In South Africa, though, there is no official distributor for iPhones, as telcos - such as Vodacom - and even banks - such as FNB - import and sell the handsets in the country.

Yet Goldstuck explains that even the lack of an official distributor for iPhones in SA is not a great motivating factor for consumers to buy grey product versions of the device in the country.

“The cost of grey iPhones is not much better than the officially sourced items - only availability is better.

“Given that they often have to be ‘jail-broken’, which limits your support options if something goes wrong, buying from local sources will be a better bet for the average user.

“The hard core techies will probably find a grey version serves their needs adequately - but mostly because they can get it fast, rather than because it is a better deal,” he adds.

South Africa is one of the most important mobile markets in Africa, as it has a penetration rate of about 100%, according to BuddeComm research, meaning that there are approximately 49 million handsets in the country.

Moreover, about one out of every four phones sold in the country is a smartphone, according to Gfk research.


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