Who's ready for a thousand-dollar iPhone? Answer: probably quite a lot of people. Millions are likely to buy Apple's new iPhone X when it ships in November, despite its base US$999 price tag in the US. In the UAE, it's set to be even more expensive, retailing from Dh4,099..
Many are also likely to buy the also-new and slightly less expensive iPhone 8, which goes on sale this month starting at the relative bargain price of $699.
But the fact that the new phones will almost certainly sell by the bucket load doesn't justify their astronomical price tags. Technology isn't supposed to work this way.
Gadgets are supposed to get cheaper as well as better over time , at least according to the celebrated Moore's Law, or Ray Kurzweil's Law of Accelerating Returns.
Every year, the logic goes, the components that make up smartphones and other gadgets – from processors and batteries to storage and screens – improve in quality and decline in cost.
Despite this phenomenon, Apple's signature bauble now sells for twice as much as it did when it was first introduced a decade ago.
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Read more:
Apple iPhone X launch: facial-recognition and a brand new look
At what price will the UAE fall in love with the new iPhone X?
Comment: $999 for an iPhone X? Where do I sign?
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A few factors explain why the iPhone has so far bucked the trend that otherwise applies to all other categories of electronic devices, such as laptops, tablets and televisions.
First up is the perceived value of a smartphone. For many people, it's the most important gadget they own – possibly even their most important possession over all. It's like a limb that connects us to the world and to each other.
Given this, what price a limb? Can all of the things that smartphones do for us and everything they enable us to do really be distilled into a simple monetary value?
If it were possible to come up with such an equation, it might be that a smartphone is actually worth well more than $1,000. The sky's the limit, really – and the same can't be said about laptops or televisions.
There's also the perceived value of the iPhone as a premium brand. There are plenty of cheaper smartphones that are arguably as good, or nearly as good, but Apple's device is still seen as king. Credit has to go to the company's marketing machine for that.
The biggest driver of price in the first iPhone decade, however, has been the method in which smartphones have been sold in markets such as Western Europe and the US, where wireless operators have subsidized the devices in exchange for customers signing onto multi-year service contracts.
Customers in such markets have received lower up-front prices for their smartphone, in exchange for the rest of the costs being amortized into monthly service bills over the length of their contracts.
With the iPhone’s true cost broken up and hidden in such a way, its hefty price tag has been out of sight, out of mind. That also doesn’t apply to tablets and TVs.
Apple and operators have benefited greatly from this arrangement. Estimates have pegged the company’s profit margin on the iPhone to be in the whopping 70-per-cent range. A number of analysts have declared it the most profitable product in history as a result.
Many operators in the US and Europe, meanwhile, have routinely posted margins in the 40- and 50-per-cent range. Oil giant Exxon Mobil, by way of comparison, only managed but a measly 5-per-cent margin in its most recent quarter. operators have supplied the veritable smokescreen for Apple’s continually climbing prices and have made a mint in the process.
So can anything be done about this never-ending iPhone-price inflation, which is also pulling up the prices competitors such as Samsung charge for their flagship phones? And more importantly, should anything be done?
Some countries have tried to take action. Finland and Belgium, for example, used to have rules that prohibited operators from subsidizing phones, but the results were mixed at best.
Both countries found uptake of advanced, expensive devices to be slow as consumers resisted paying big costs upfront. Adoption sped up dramatically after they changed the rules and allowed operators to bundle service with phones, in 2006 and 2010 respectively.
In the world of technology, that was an eternity ago. It might not be a bad idea to revisit such prohibitions now that smartphone use is widespread in most developed countries. The UAE for example leads the world in smartphone adoption with more than 80 per cent of the population on board.
Preventing operators from handling phones would expose more consumers to the full costs being charged by Apple and its competitors. They could balk and force prices down.
At the same time, there's some evidence that chafing is already happening. Prior to last week's new product unveilings, Chinese manufacturer Huawei – known for its lower cost devices – briefly beat out Apple to become the world's second-biggest maker by volume after Samsung, according to Counterpoint Technology Market Research.
While Huawei sells most of its phones in developing markets such as China and India, the momentum shows it is also making headway in advanced economies too. Its growth is proof that a growing segment of smartphone users around the world are starting to become more price conscious.
In light of that, the best thing to do about skyrocketing prices might actually be nothing. A few more years of market-share losses might convince Apple to try a different pricing strategy.
Recent winners
2002 Giselle Khoury (Colombia)
2004 Nathalie Nasralla (France)
2005 Catherine Abboud (Oceania)
2007 Grace Bijjani (Mexico)
2008 Carina El-Keddissi (Brazil)
2009 Sara Mansour (Brazil)
2010 Daniella Rahme (Australia)
2011 Maria Farah (Canada)
2012 Cynthia Moukarzel (Kuwait)
2013 Layla Yarak (Australia)
2014 Lia Saad (UAE)
2015 Cynthia Farah (Australia)
2016 Yosmely Massaad (Venezuela)
2017 Dima Safi (Ivory Coast)
2018 Rachel Younan (Australia)
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
Mohammed bin Zayed Majlis
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Profile of Hala Insurance
Date Started: September 2018
Founders: Walid and Karim Dib
Based: Abu Dhabi
Employees: Nine
Amount raised: $1.2 million
Funders: Oman Technology Fund, AB Accelerator, 500 Startups, private backers
Other key dates
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Finals draw: December 2
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Finals (including semi-finals and third-placed game): June 5–9, 2019
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Euro 2020 play-off draw: November 22, 2019
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Euro 2020 play-offs: March 26–31, 2020
No Shame
Lily Allen
(Parlophone)
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
Company profile
Company: Rent Your Wardrobe
Date started: May 2021
Founder: Mamta Arora
Based: Dubai
Sector: Clothes rental subscription
Stage: Bootstrapped, self-funded
COMPANY%20PROFILE%20
%3Cp%3EName%3A%20DarDoc%3Cbr%3EBased%3A%20Abu%20Dhabi%3Cbr%3EFounders%3A%20Samer%20Masri%2C%20Keswin%20Suresh%3Cbr%3ESector%3A%20HealthTech%3Cbr%3ETotal%20funding%3A%20%24800%2C000%3Cbr%3EInvestors%3A%20Flat6Labs%2C%20angel%20investors%20%2B%20Incubated%20by%20Hub71%2C%20Abu%20Dhabi's%20Department%20of%20Health%3Cbr%3ENumber%20of%20employees%3A%2010%3C%2Fp%3E%0A
Scoreline
Abu Dhabi Harlequins 17
Jebel Ali Dragons 20
Harlequins Tries: Kinivilliame, Stevenson; Cons: Stevenson 2; Pen: Stevenson
Dragons Tries: Naisau, Fourie; Cons: Love 2; Pens: Love 2
Mohammed bin Zayed Majlis
