An Influx of International Stock Disrupts the Resale Market, Leaving Some Dealers with Losses Exceeding Dh200,000
The launch of the iPhone 16 on September 20 has historically been a lucrative event for resellers in the UAE, drawing excitement from both buyers and those looking to profit from the latest Apple release. However, this year’s launch has taken an unexpected turn, resulting in significant financial losses for some resellers, with reports of losses reaching as high as Dh200,000.
Every year, the debut of a new iPhone model presents an opportunity for savvy UAE residents to make quick profits by reselling the devices at inflated prices. The iPhone 16 was no exception, with pre-booked buyers eagerly flocking to Apple stores on launch day. Resellers initially capitalized on this frenzy, purchasing devices at a markup of up to Dh2,500 on launch day.
Initial Success Turns to Misfortune
Many resellers, such as JA, an electronics dealer in Dubai, invested heavily in acquiring multiple devices in anticipation of high demand. “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, paying a premium of Dh2,000 for each Pro Max model,” JA explained. Initially, this strategy seemed promising as they managed to sell a few units for a small profit.
However, demand rapidly dwindled. “We tried to sell them with a lesser profit margin of Dh100 to Dh300 on the first day, but we managed to sell only 20 units,” JA continued. Many of their clients who had previously expressed interest backed out of their commitments, leaving the resellers with a stockpile of unsold devices.
A Market Flooded with International Stock
As the launch progressed, the situation worsened. The market was inundated with iPhones from international sources—Hong Kong, Singapore, the US, Japan, and beyond—further saturating supply and drastically reducing demand. “Thousands of devices flooded the UAE market, and suddenly, the demand was gone,” said Altaf, another electronics dealer in Dubai. With competing devices available at lower prices, consumers were no longer willing to pay a premium.
This overabundance of stock has led to devastating losses for many resellers. “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 who based his investment on previous successful launches. “Last year, I made a profit of Dh70,000 on the iPhone 15 models in just 10 days.”
A Cautionary Tale for Resellers
The collective experience of these resellers serves as a stark reminder of the unpredictable nature of the market. Despite previous years indicating a consistent demand for new iPhone models, this year’s oversupply has left many dealers struggling to recoup their investments. “It’s tough this year. The market didn’t react the way it did in previous launches,” MP lamented.
As resellers navigate this challenging landscape, many are left wondering if they will be able to recover from their losses and what future iPhone releases might hold for their businesses. The launch of the iPhone 16, once seen as a golden opportunity, has become a cautionary tale for those looking to profit from the ever-evolving world of consumer electronics in the UAE.
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