The HANDELOT TIMES May 2018
The rising trend of used and refurbished phones
10 Brendan's Company Spotlight
12 Dispatches from The Old Hand
28. Xiaomi, The People
32. Najib's Corner: The Wind of Change
Hey traders, your friendly neighborhood author here. This issue of The Handelot Times is centered around the trading of used mobile phones. The idea for this theme comes from the attempt to create a new rubric for grading used phones. Many manufacturers and traders have different ways of grading stocks. We believe in trying to simplify that process, so we’ve shared our idea for it here.
Tied in with the idea of grading differences, I’ve also written for you an article detailing the difference between used and refurbished phones, and why they may fetch higher prices than your typical used phones. There’s also a dark side to used phone trading: stolen phones. When stolen phones are traded, nobody wins. Taking the issue seriously, this issue’s Stay Safe Out There article deals with the underbelly of stolen mobile phone trading.
On the back of the visit of Neva Systems to our Wroclaw office, I had a wonderful discussion with the firm’s braintrust about their new and improved way for testing used phones. They’re very excited to share the details with us, not to mention extremely optimistic about the future of trading used phones, you can check that within!
Aside from that, we have a brief wrap-up of our first ever Handelot awards, a regular check-in from The Old Hand, our usual Takeaways From The East, and an intriguing look at the passion of Xiaomi fans and how far they take it. Is naming your child after your favorite brand taking it too far? You can decide when you read inside.
All of the above and much, much more in this edition of The Handelot Times. Now turn the page – you’re gonna like what you read.
Ed THE HANDELOT TIMES- The Online B2B Magazine for Electronics Wholesalers
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05. Index 1
02 Used Phones Theme Summary
03 Sound Business
06 Quick Hits
07 Yukatel - Pioneer in Dropshipping
09 Digital Smile: Your Business Partner in Need
10-11 Company Spotlight: BlankIT
12-15 A Dispatch From The Old Hand
16-19 Towards a Unified Grade System
20-21. Used and Refurbished Mobile Devices Are Back
22-23 VIP Gold Members
25-27 Handelot Times Feature: Neva Systems
28-29 Xiaomi, The People
30-31 Takeaways From The East
32-33 Najib's Corner
34 Best Movers on handelot.com
35 XTG - Smoke From a Drop Shipper
36-37 Stay Safe Out There: Stolen Phones
38 Rational FX
39 VIP Stamps
40-41 Refurbished Phones
42 Handelot Pricelist
43.Logistics and Services on handelot 1
44 Contact Us!
06. Quick hits 1
Samsung has re-emerged as the world’s top smartphone manufacturer in Q1 2018, according to IDC. Apple had briefly claimed the top spot in market share the previous quarter, edging out the South Korean firm. Rounding out the top five are Huawei, Xiaomi, and Oppo, all recording slight gains for the quarter.
Strategy Analytics, however, reports that the iPhone X, iPhone 8 and 8 Plus, and the iPhone 7 (?!) take four of the top five top-selling smart devices for the very same quarter. Samsung’s Galaxy S9 is expected to gain back ground, having been released near the end of the quarter.
We are already beginning to see that happen, says Bloomberg. Apple’s performance on the stock markets hit a rough patch as sales cooled on the iPhone X at quarter’s end. Taiwan Semiconductor Manufacturing Company, who produces the iPhone’s chipset, reported sales of $1 billion USD less than expected, which caused Apple’s stock prices to take a slight tumble during the latter half of April. Stock value has since mostly recovered.
In the midst of Facebook being under fire for data breaches in the Cambridge Analytica scandal and pledging to be more transparent, Bloomberg reports that the social media company spent $3.3 million USD on lobbying in Congress, an all-time high for them. Issues Facebook has lobbied on include an information transparency bill, which they support.
Cloud computing company Pivotal amassed a market capitalization of $3.9 billion USD after its IPO in mid-April, according to Forbes. Pivotal, whom Dell has a 70% stock in, makes software designed to bridge IT architectures built on private and public clouds. They compete with IBM and Oracle, who offer similar services.
Xiaomi, having begun to make inroads in Europe last year, is set to make its official debut on the UK market according to TechRadar, with mobile service provider 3 leading the way. 3’s Chief Digital Officer Tom Malleschitz has hinted that Xiaomi’s introduction will include smart home products as well as wearables.
Per a report from Bloomberg, American telecom giant AT&T stands accused of stealing content streaming from my24hournews.com, with whom the telecom giant agreed to invest in but later reneged. Engadget further reports that AT&T says that the suit lacks merit, adding that it is not the first time suit had been filed against them
07. Yukatel - Pioneer in Dropshipping
09. Digital Smile- Your business Partner in Need
10-11 Brendan's Company Spotlight- Blankit
COMPANY SPOTLIGHT: BlankIT
In getting used phones ready for resale, they must undergo a thorough process to ensure not only that they are functional, but that they are free of any traces of data from the previous owner. This is a segment of the market with lots of potential, and BlankIT has been capitalizing on it since 2014. With its team of quality control engineers, programmers, and technicians, BlankIT has remained steady in the belief that happy workers are productive workers, and it is a key reason they are able to deftly cover many areas of the used phone readiness process while still achieving consistent growth.
Employing a core staff of 22 people, BlankIT specializes in four areas: quality control, configuration, data erasure, and independent stock handling. Quality control operators make up nearly a third of the staff, who “grade to sell” in order to create the most potential value for stocks. This talented crew also creates bespoke quality control systems for their customers’ use, which the company notes can be “replicated or improved many times over.”
The configurations sector cuts through obstacles to make phones operable and sellable again, such as adding or removing SIM locks, network configurations, demo software, ridding the device of previous branding, and adding of the customer’s own configurations. BlankIT also creates and loads specially-tailored apps to the customer’s specification, and fully kit up the phone with accessories and packaging where applicable.
BlankIT’s data erasure process oversees the factory reset and full, industry-standard erasure of the phone’s contents, using their in-house, forensically-approved procedure. Should you need further assurance, all successful wipes and erasures come with a certificate as proof of the work done.
Perhaps most conveniently for traders, BlankIT offers a stock holding and inventory management service, including processing to achieve optimal value and discreet viewings of stocks for customers (and their customers alike). The company will also hold the stock while all involved parties negotiate deals, and offers to ship stock according to specifications.
Each member of the BlankIT Team works according to their area of expertise, employing a flat hierarchy while treating the customer as the true boss. This model of work keeps the staff satisfied and motivated, and has allowed BlankIT to grow at its own pace, gradually taking on new talent to this small but dedicated team. The ever-increasing inflow of work means that the company is constantly outgrowing its facilities. The company reports that new facilities have been secured for operation, and a recruitment drive for extra personnel is forthcoming.
The bigger place and extra help is going to come in handy, as the company sets the bar higher for itself with its Four Pillars of New Development: high volumes of configuration loading, the development of a data erasure app, semi-automated device functionality testing, and in-device battery efficiency testing. In the future, the industry may well be looking to BlankIT as a jack of all trades.
12-15 Dispatches from The Old Hand
Coming from a simple farming background, I would like to think that I “call a spade a spade.” That’s an old English saying for verbally expressing something exactly as it is. Speaking the truth directly and precisely.
In today’s society we have so much spin on everything that it’s hard to distinguish between it from the truth. This spin doesn’t exist without reason. It’s used all the time by corporations, and by politicians to justify their actions before they implement something that they already know isn’t justifiable or right.
From their implementation of spin, they hope that their intended audience will be pacified into acceptance of their policies without question. Even when challenged about their policies, it’s often hard for any smaller companies or individuals to advance that challenge. If it goes to court, then it will end up as a David and Goliath scenario with finance proceeding.
I have touched on this in the past and what I am referring to is Samsung pursing their policy to prevent traders importing goods from Europe to the UK for profit.
That’s a dirty word, “profit”. Unless of course you are a large corporate vendor who likes to make lots of it. But hey, so do we all. Working in a capitalist society, I wasn’t aware it was a crime to do so.
It now seems it is dependent on who or what you are!
It seems that there is a profit to be made from importing EU stock into the UK, changing the two pin charging plug to a three pin plug and then selling it on. Well that’s great news guys, maybe we can share some of the coin.
Seems not, because if we open the box, change the plug and replace it with a non-original Samsung plug, or tamper with the software or remove network locks then we are breaking the law.
How does opening the box or changing the charger affect the warranty of the handset?
I wonder to myself why Samsung would leave a space in the market to allow parallel traders to make any profit at all. They should definitely know by now that if that space exists, we will surely capitalise on it.
Could it be possible that Samsung didn’t deliberately leave that space to help us make some loot? Maybe there is another reason. Is it possible that Samsung has a different pricing and distribution structure in the UK than that of the EU?
It couldn’t possibly be that they could make a higher margin in the UK than the EU due to the control of the three-pin plug, could it?
Now that sort of unruly behaviour was very prevalent in the 90s in the car manufacturing industry. as left-hand and right-hand drive variants until the EU stepped in and put a stop to it.
I don’t believe that could be the case. After all ,there are very stringent and precise EU laws to prevent large corporate companies from carrying on with those sorts of unfair business practices.
Where very large corporations are concerned, anticompetitive practises are clearly set out in Article 101 of The Treaty on the Functioning of the European Union (TFEU).
(ex Article 81 TEC)
1. The following shall be prohibited as incompatible with the internal market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market, and in particular those which:
(a) Directly or indirectly fix purchase or selling prices or any other trading conditions;
(b) Limit or control production, markets, technical development, or investment;
(c) Share markets or sources of supply;
(d) Apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;
(e) Make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations, which, by their nature or according to commercial usage, have no connection with the subject of such contracts.
2. Any agreements or decisions prohibited pursuant to this Article shall be automatically void.
3. The provisions of paragraph 1 may, however, be declared inapplicable in the case of:
- any agreement or category of agreements between undertakings,
- any decision or category of decisions by associations of undertakings,
- any concerted practice or category of concerted practices,
which contributes to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, and which does not:
(a) impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives;
(b) afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question.
If this was the case, I think this would be covered by (1:d)
For companies that hold a dominant position in the EU, Article 102 can be applied.
Dominance is assessed on the basis that an EU company holds 40% or more overall market share.
(ex Article 82 TEC)
Any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it shall be prohibited as incompatible with the internal market in so far as it may affect trade between Member States.
Such abuse may, in particular, consist in:
(a) Directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;
(b) Limiting production, markets or technical development to the prejudice of consumers;
(c) Applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;
(d) Making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations, which, by their nature or according to commercial usage, have no connection with the subject of such contracts.
I think if any vendor in a position of dominance in the EU was trying to charge a higher price for goods in one part of the EU compared to that of another, then this would come under Article 102 (c) as above.
With respect to Brexit, I surely don’t understand any UK resident wanting to leave the EU, when it is the EU that protects us all with such legislation.
All I can say is, thank the Lord that we as small parallel traders have some EU-provided protection from the big boys and enable us to do what is we do best: distribute and trade the product.
If I was a vendor, I would not be so obsessive about who sold my product. I would be more concerned about getting it out there. After all, its all profit for them, so why do they care so much about controlling the flow and who should make the margin in the middle?
There has to be room for everyone, isn’t that how the world works? If its not then it should be.
We all have to eat.
Keep The Faith,
The Old Hand
16-19 Unified Grade System
TOWARDS A UNIFIED GRADING SYSTEM OF USED PHONES
It’s tough to know what you’re getting in your stock sometimes. Companies in the B2B realm each have their own criteria for grading device stocks. It has caused us all a great deal of confusion from time to time, and due to that confusion we sometimes run the risk of not giving our customers the quality we had assured them. When it comes to these differences, deals are on the line!
Of course, it’s easy to deduce what a grade-A device looks like – product in (nearly) flawless condition. The step down from A to B is also more-or-less widely agreed upon. There’s not much to argue; a screen with a minor crack or a scratch can’t be a perfect A, so it must be B.
However, the drop-off from here is steep, and there is more room for discrepancies and confusion to set in. A grade-C phone can mean heavier cosmetic damage, but to what extent? How deep are the dents in that aluminum casing? Do those scratches on the glass surface near the lens obstruct the camera’s ability to work? And what about the insides – does the battery lose charge quickly? Does the phone come with one at all? Is it able to be unlocked? Was the data from the previous owner able to be wiped clean? Was it hacked?
We at Handelot want to simplify the confusion that comes from assessing a phone’s grade. We also believe that traders should have access to information that tells a device’s history in an easy, shorthand way that enables quick decisions on further action. For the first time, here is our guide to grading used mobile phones. We’ve kept the grades largely the same - from ‘A’ to ‘C’, but ‘X’ instead of ‘D’ to determine phones that have not been wiped. Also, each ‘C’ grade carries an extra letter designation that allows easy identification of problems, from a ‘CA’ for no battery to ‘CY’ for an unlockable SIM.
We welcome any and all input toward refining this new system, which we are sure will put traders at ease once in use!
20-21. Used and Refurbished Mobile Devices Are Back
Used and Refurbished Mobile Devices Are Back!
While the smartphone market stagnates after a decade of major growth, it’s the refurbished mobile market’s turn to rise. HYLA Mobile says that the secondary smartphone market is set to grow to over 55 million units in 2020. “According to a recent IDC report, the U.S. used mobile phone market is set to grow from 15 million units in 2015 to over 55 million units in 2020—a nearly 30% compound annual growth rate in line with the height smartphone market growth.” There are 4 key reasons why the secondary smartphone market will continue to grow despite near-static smartphone penetration moving forward:
Mobile Phone Demand in Developing Markets: The United States isn’t alone in its increasing attachment to mobile phones. In some low and middle-income countries, access to mobile devices has become more prominent than access to electricity and water. This correlates to increased access for low income areas within the United States as well, providing a distribution opportunity for higher end (yet affordable) used devices.
Growth in Mobile Device Insurance and Warranty Programs: When the average price of a smartphone in the United States is over $550 (and even higher if considering a high-end iPhone or Android device), consumers are expected to invest in insurance plans to protect their investments. And yet, accidents will happen and insurance claims will rise. Growing warranty and insurance claims will call for more high-end refurbished mobile devices.
Emerging Certified Pre-Owned and Pre-Owned Market: The market segment is young, but major players are starting to make their presence felt. Best Buy, Walmart, Apple, and Target are providing customers with alternative means of purchasing devices—even if they have credit issues and can’t purchase equipment in installment plans.
Regulation of Electronic Waste: According to the U.S. EPA, electronic waste grew 120% between 1999 and 2009. Worse, only 25% of the 2.4 million tons of disposed electronics were collected for recycling. Now, individual states are taking it upon themselves to regulate electronic waste, which will drive more devices into the secondary market. These driving factors are pushing carriers, retailers, and OEMs to find more efficient ways of recycling smartphones.
Carriers, retailers, and OEMs have always had trade-in programs, but old standards won’t scale to meet growing secondary market demand—especially if you’re trying to maximize value. Mobile phone recycling has a three-stage lifecycle: device collection (enabling incentivized mobile trade-in and recycling in an omni channel fashion), device processing (wherein collected devices are sent to a central location for an automated solution to validate the trade, process device grade, and clear data), and device disposition. This last one is crucial: a portion of the devices must go to stakeholders for internal needs—insurance claims and warranty fulfillment. Others can be used for a CPO program. And whatever you’re left with is either sold in the secondary market or deemed beyond reuse, in which case you recycle according to R2 standards.
This article was adapted using information from a report on the HYLA Mobile Blog.
22-23 VIP Gold members
25-27 Handelot Times Feature Neva Systems
Neva Systems: An Emerging Beast
As smartphone technology gets increasingly cheaper, more new devices are bought, with the existing ones becoming unloved and unwanted by their owners. If you’re in on the used device side of the industry and you’re looking to build a reputation rather than make a quick buck, then you’re concerned with helping deliver the best possible product. The used smartphone market is growing quickly, and as a result there are many business opportunities.
“The used phone market is growing fast in the US and EU, and we feel it is very strong,” says Akanimo Emah, head of sales for Neva Systems. Neva – soon to be rebranded NSYS Group to coincide with their opening of offices in the United States and the European Union – is a UK-based firm specializing in the testing of used smartphones. They have developed a diagnostics tool that allows for testing on a mass scale: up to 60 phones at one time, with a testing time of less than 60 seconds each. Neva is also proud to announce that their diagnostics solution helps reduce return merchandise authorizations by more than half, with testing times reduced by a factor of three.
“Who uses our services?” COO Vadim Tim asks rhetorically. “Wholesalers, recyclers, retailers, repair centers, buyback providers, network operators, insurance providers. Also some quality control departments of manufacturers use our services.” With customers on five continents and the aforementioned expansion of their office space, Neva seems poised to takeover the market and the world! When I spoke via Skype with the braintrust behind Neva, however, their words assured me that they care about two things: quality and consistency. Their large customer base also opens up myriad opportunities for collaboration. All in all, things are looking up. Here’s the full conversation:
Tell me about the history of the company.
Gregory Glazman, CEO: At first, I started in the business in 2010. It’s quite a dynamic market, dynamic business, and on occasion I exchanged products, mostly iPhones, but I changed other positions as well. I moved to used phones because it was a more profitable market. I thought it could be a big part of the IT industry, and definitely more interesting. Of course, I had to shut down my old business because there was a conflict of interest. So we started Neva in 2016, and in 2017 we started sales. We are quite a young company, but we are moving very fast. Our results aren’t bad. We have bigger plans for the future, and we are sure we will achieve our goals and dominate the market.
Vadim Tim: One of the reasons we get good results is because the people in our company have a lot of experience in trading, therefore we are about to come up with solutions that meet the needs of the market. That’s why we’re successful. Also, we’ve got a team full of genius-level developers, some really talented people that allow us to offer the best services in the world that you can’t get anywhere else but from us.
GG: One of our main advantages is that we actually have our own team of developers, as opposed to some of our other competitors, who use freelancers. This allows us to act quickly and meet our customers’ demands.
AK: We operate globally, covering five continents. We have different solutions ranging from diagnostic tools to data clearing, auto activation and print labeling services, to certifications and device histories. We deal with iOS and Android devices, including tablets. We are down-to-earth with our customers, and understand what the market needs.
Tell me about your NS Diagnostic Tool. How long did it take to develop?
GG: It never stops [laughter]. But the first version took 8-9 months to develop.
Can you tell me about some of the things that have helped your company grow?
GG: Of course, our experience in the industry and our development team. And because our sales department is strong and multinational. Our company is represented by several different nations, which is not only important in terms of speaking languages but for our overall mentality. Also, the sales department is divided into Asian, European, Middle East, and US sections, which helps bring us closer to our customers. We work 24/7.
Do you see your competitors using similar testing methods?
GG: We’re not alone in this market, and we’re happy to have competitors because it helps us get stronger and faster. The stronger they are, the stronger you will be. I hope that they’ll help us get stronger and stronger.
Where do you see the used phone industry going?
GG: This business grows faster than the retail industry, about 20% per year worldwide. There’s reason to believe that it will continue to grow for at least the next four years.
VT: The average life-cycle of devices is three years. An average user changes their device every one-and-a-half years, so there are lots of secondhand devices as a result. People want to purchase top-of-the-line phones for $200-300, but if they want an iPhone or a Galaxy S, it will have to be used. Demand is growing, which is why the market is becoming more profitable. More and more companies are entering the industry as a result.
What do “good results” mean to you?
AK: For me, that’s when a client calls me and says “Ever since we started using your software, we’ve been able to increase production by 40%, we’ve been able to cut costs on production, we’ve been able to eliminate human error completely.” This feedback is the good result. It’s paramount. It makes us feel like we’re doing the right thing.
VT: The success of our customers is the most important for us. And we believe we’ve really helped them be successful and profitable. For example, one of our customers is a wholesale company with a monthly turnover of approximately ten thousand devices. Their business model is based on purchasing PGL stock, and they sell their used devices wholesale, fully tested and complete with warranty. Before they used Neva Systems to test their stock, they had five testers and an RMA rate of 4,5%. Now that they’ve used our methods, they’ve taken that number down to 1.9% – a reduction of more than half!
Not only that, but testing time was minimized so much that it now takes a third of the time to complete it, allowing for the faster process of stock to save money on human resources. They now have only three testers, but they are still working with the same volumes of mobile devices.
Our customers say we are #1 in accuracy. It’s very important to us, because good results mean accuracy, and also speed. Nobody is testing used phones more quickly and more accurately than we are.
GG: We have long-term relationships with our customers, and it pleases us to see them use our services more and more, because that means they are happy with us.
Any last words?
AK: Neva Systems is coming strong. We have everything you’ve been looking for!
VT: The industry had had a common problem: how to evaluate a device and check its operability. That’s why we’re here.
Thank you for your time.
If you’re in need of a used phone diagnostics solution, you can find Neva Systems at http://nevasys.com
Interview edited for clarity.
Left to right: Vadim Tim, Gregory Glazan, Akanimo Emah
28-29. Xiaomi, The People
Xiaomi, The People
If there’s one more takeaway that can be had from the Chinese market’s Q1 results, it’s that Xiaomi is unflappable, being able to thrive even in adverse conditions. Last summer, when The Handelot Times profiled the fastest growing Chinese smartphone manufacturer, we noted how they had a passionate fanbase that rivaled Apple’s fervent (if unofficially named) Cult of Mac community. So-called “mi fans” are unabashedly enthusiastic, establishing myriad messageboards throughout the internet, voicing their undying affection for the upstart brand.
That Xiaomi has been able engineer such a movement is unique, with respect to the Cult of Mac, who are seduced by the sleekness of device design, ease of use and customer service. Android users in general have touted their devices’ superiority, largely attributed to its ability to be perfected thanks to its open-source coding. However, Xiaomi is the first Android-based phone manufacturer that has supporters who can arguably match the zeal of Apple fans. Bloomberg News points out that Xiaomi engages with their supporters far more than Apple does, reaching out via social media and incentivizing further purchases through the use of tactics like flash sales and product giveaways.
Two Xiaomi fans in Indonesia may have crossed the Rubicon, however. According to GizChina, Fredi Yana and Delima Naufalyn have named their newborn daughter, born April 18th, after the company. No joke. Here’s the birth certificate to prove it.
Naming children after a pursuit is nothing new. Sports is one of the most common inspirations for names, and you probably have that couple in your neighborhood with their son named Ronaldo or Sachin, or daughter christened Oksana or Christy. But a cell phone company? That’s serious love for tech.
Xiaomi is now beginning to creep into Europe, having entered the Spanish market last year and getting ready to officially step into UK stores. Moreover, European users who have managed to get their hands on Xiaomi devices have already started online fan communities in their mother tongues. Whether any children named Xiaomi Gonzales or Xiaomi Smith come of it is to be decided, but if they can continue expansion while deploying the same tactics, they may seriously give Apple a run for its money.
30-31 Takeaways From The East May 2018
TAKEAWAYS FROM THE EAST
The fall gets steeper in China, while featurephones gain a larger foothold in India.
Canalys reports that smartphone shipments in the Chinese market declined by a whopping 21% for Q1 2018, shipping below 100 million units for the first time since 2013. Xiaomi was the only manufacturer to post notable growth in the quarter, expanding 37%. Huawei posted a growth rate of 2%, while Oppo and Vivo shrunk. Xiaomi could owe this bear-market success to their concentration on the low-end smartphone market; according to Canalys’ Hattie He, they are the only one of the major Chinese firms focused on it. Year-on-year, meanwhile, Samsung continues to feel the squeeze as the usual homegrown suspects slowly push them out. In Q1 2018, the South Korean smartphone giant accounted for 27% of the market, compared to 42% in the same quarter last year.
The notion that the firm specializing in the cheapest phones is also the one growing the strongest is taken to a logical extreme in India. Counterpoint Research reveals that Q1 not only saw the smartphone market flatline in the country, but their featurephone market take off. Featurephones, not to be mistaken for “dumbphones,” are simple devices that can provide functions like broadband web-browsing and gaming, but are not developed to handle the intensive apps that a smartphone would have.
This growth was lead by the launch of the JioPhone, launched last summer. Mumbai-based Jio, who was a non-factor in last year’s Q1 reports, claimed 36% of the market, whereas Samsung’s share of featurephones dropped sharply. Also of note is the fact that Nokia – featured in the previous edition of the Handelot Times – claimed a 7.3% share of the market where they also had no presence the previous year.
The big news for Indian smartphone shipments is that Xiaomi has a record 31% of the market there, a record. Along with Honor and OnePlus, they were the one of the fastest growing brands in Q1.
WHAT DO WE TAKE AWAY FROM THIS?
The news of the continuation of the consolidation of the Chinese smartphone market, which increasingly favors domestic brands, is buried by this alarming report. Is it time to smash the panic button yet? Canalys reports that inventory issues plaguing Oppo and Vivo throughout the past couple of quarters have now been cleared up. That leaves Samsung, who we previously reported as fraudulently selling older devices as new, Huawei meager growth, and Xiaomi’s aforementioned strong showing.
In India, while smartphone shipments stood still (possibly by design), the featurephone market has grown. If we take the continued success of Xiaomi in China and the explosion of both a new brand and a returning favorite in India, it is evident that consumers in these countries are trending toward cheaper and cheaper devices. Therefore the time is not yet to panic and move as much stock as possible, but rather to watch the featurephone market in India closely. Meanwhile in China, featurephones do not seem to be a staple among domestic consumers, although Chinese featurephone brands are wildly popular in Nigeria and other countries on the African continent (per Counterpoint). Whether they try to infiltrate the Indian market is also a matter to be watched.
32-33. Najibs Corner
THE WINDS OF CHANGE IN THE DUBAI MOBILE BUSINESS WORLD
The guys at Handelot summed it up very well today when we met in DAFZA, Dubai. What used to happen in Dubai was unusual, and what’s happening now is the new normal across the world. Companies were making money off the charts, and the markets used to absorb any number of devices raining in. I would like to take this opportunity to introduce the new Dubai trading to our readers and what to expect for the times to come. In short, things have changed...and changed for good.
REASON FOR CHANGE:
a. Implementation of 5% VAT in the local market in a trade that was barely making 1-1.5%.
b. Direct approach of brands in key markets such as Saudi Arabia, where devices are sometimes cheaper than in Dubai. Plus, local regulations regarding imports of products without 3 PIN chargers is almost next to impossible.
c. Iran implements the IMEI block that rules out any grey imports. The majority of Iraq and Kurdistan business was based on the cross-border grey trade with Iran. There goes another market for exports.
d. There aren’t too many brands to trade anymore. It’s a fight between Apple and Samsung with Huawei occasionally making it interesting. The only surprising comment I heard yesterday was from a distributor in a key market. They said that they would only sell Huawei in the grey if it’s bundled with their Samsung stock. What does this mean? There are just too many Samsung units floating around in the market, and the recent flops of the flagships didn’t help the cause either.
e. Huawei and Honor are the brands to watch.
f. The fallout from the largest distributor that went bust last year has been significant in the UAE. However, it leaves a void to be filled by anyone who is willing to take a chance.
First, there is mass migration to the Dubai Airport Freezone, as everyone who can afford to pay the bill is moving into offices or taking warehouses. DAFZA is having a field day with new warehouses being made available about 5 kilometres from the current location. Is it worth moving in? Well, there is no more business in the local market so we’ll have to wait and see.
There are three types of traders hovering around now. The first ones being cash-rich and having a clear trading mentality. They are still doing well in spite of volatility with Apple’s prices across the region. Apple does not have a clear pricing strategy in the Middle East, and their regional partners are simply fighting it out, providing a room for traders to do well. Secondly, there are distributors of various brands who are keen to attract customers at IR and KDR platforms, as well as trade in parallel. The local market appetite can never meet the exorbitant trading volumes, thus putting a big dent in their earnings. The third and the last ones are the lost souls waiting for the good times to come back. They have no vision or plan and are just hanging in there to see what comes next. I can assure you that they won’t be around for much longer.
CLARIFICATION REGARDING USED MOBILE BUSINESS:
This is an important one: for companies interested in the USED device business in the Middle East region, please note that graded phones are not sold AS IS but are usually refurbed and sold as new. This is quite a statement, but it’s a fact; an A-grade would sell, as would a C/D, but there is no market for B-grade phones. There are almost no locally procured products, and everything gets imported to be refurbed.
Knock knock, hello? Are you there? I thought you’d disappeared or went into a long slumber. The whole market is so glad to meet you after all these years. Well, the cheers of the market might just be a few months away, but I would like you to stay strong and tight. Your time is now here. Who am I talking to? Well, the ‘B’ Android brands that have been shadowed by the two big guns, Samsung and Huawei. As the trade winds die out, these brands will dust off their tired bodies and come forth. You need to have Chinese blood running in your veins however, so Alcatel, Nokia and Motorola should roll up their sleeves to get into the game. I am not so sure about the likes of Sony, HTC and LG, but the market will soon be ready to embrace everyone with value and deep connections with customers. The Dubai factor of overflowing trading goods is no more, and there won’t be any improvement in the coming quarters for local traders. Even Oppo and Xiaomi are making the required strides in the market.
In short, the map of the region has changed, and it’s time to embrace it.
34. Best movers on handelot.com
handelot worldwide splitdown in Regions:
Easter europe 25%
Middle East 17%
western europe 32%
Best movers on handelot May 2018 - Mobility
1.Apple 2229 trades
2. Samsung 1843 trades
3. Xiaomi 791 trades
4. Huawei 533 trades
5. Samsung LCD 427 trades
6. Nokia 258 trades
7. LG 257 trades
8. Sony 127 trades
9. Motorola 124 trades
10. Blackberry 92 trades
Best movers on handelot May 2018 – Inhome
1. Samsung 246 trades
2. Sony 218 trades
3. LG 207 Trades
4. Canon 144 trades
5. Nikon 107 trades
6. Microsoft 90 trades
7. Nintendo 44 Trades
8. Panasonic 21 trades
9. GoPro 18 trades
10. Philips 17 trades
35. XTG - Smoke from a Drop Shipper
36-37. Stay Safe out There
Stay Safe Out There: Stolen Phones Edition
Don’t get caught up in the game!
We, as sellers, exist to get quality products into the right hands, wherever that maybe. As people make plays for the newest technology and discard their previous phones, it’s up to us to find new homes for the old ones (and there are willing buyers, as evidenced by the numbers reflecting the growth of the industry). We would all like to believe that our stock has been acquired cleanly and honestly, 100% of the time. Unfortunately that can’t always be the case.
Petty thieves regularly steal phones hoping to turn them around for a quick sale and a quick buck. At the end of April, a police raid in Noida, India uncovered a gang of mobile phone thieves who sold their stolen wares on OLX, complete with fake technical specifications. Storefront also deal in the selling of ill-gotten tech; a raid by Mumbai police in early 2018 revealed that a phone repair shop knowingly accepted stolen phones and reselling them. It can’t be accident – the owner fled from the police and is still missing!
It goes deeper still. In 2014, a globe-spanning organized smartphone theft ring was busted in Minnesota, wherein a family-run organization known as the Mustafa Organization instructed runners to not just steal phones, but also acquire them as part of bogus service provider contracts using stolen and false identities, and resell them as new in Mustafa-owned mobile stores in the Minneapolis/St. Paul area of Minnesota, as well as the black markets of the Middle East and China. Often, the runners would purchase and activate multiple phones – sometimes as many as thirty – under a single user account! Twenty-one people were indicted, with the ones spearheading the operation sentenced to anywhere between 87 and 130 months in prison.
Per stopcellphonetrafficking.com, phone trafficking is a serious issue that harms the mobile phone industry; it has cost the American sector up to $1 billion, which in turn cheats consumers by raising prices worldwide. Trafficking also enables criminal activities, from ponzi schemes to terrorist activity.
There exist a plethora of articles that warn consumers about the possible risks of buying used mobile phones, both as a hand-me-down and through online retailers. Stories abound of mobile phones that were bought and thought to be in perfect working condition, only to be reported as stolen and have their phones rendered inoperable. What’s more, communicating the problem to the seller, manufacturer, and even the police are of no use at all, leaving the consumer to eat the loss on his own, not to mention in the lurch.
In the wake of the Minnesota theft ring bust, the state’s legislature enacted legislation stating that manufacturers must include a “kill switch” on devices in the event of theft, letting consumers control what is an otherwise stressful event.
Until further such legislation is passed worldwide, it is up to us as sellers to do our part to ensure that our hands stay clean of stolen goods. We must not enable criminal activity, and we must be careful to verify our sources of our stocks and ensure that they aren’t stolen. It’s not worth breaking the trust of customers, which is absolutely paramount as they are why we are here in the process!
39. VIP Stamps
40-41. Refurbished Phones
What Exactly Is A Refurbished Phone?
It’s one thing to purchase a used phone, which typically can be two or three generations old, at a drastically low prices. However, should your brand new iPhone or Galaxy get lost, stolen, or otherwise meet an untimely demise, the chance of buying another that’s both less than two generations old AND in good-as-new condition at a discounted price is highly possible.
Refurbished phones are phones that have been return to the point-of-sale because of a defect. Unlike with used phones where any flaws go untreated, the phones are repaired, re-tested, cleaned and put back on the market. It would be disingenuous to sell them as new even at the highest quality, so they trade at slightly lower prices.
Refurbished phones mean big business, and third-party firms have popped up to facilitate sales. As the price of new Apple and Samsung devices rise with each passing year, refurbs (as they are colloquially known) are a more attractive option. For example, a consumer in Britain could spend $999 for a brand new iPhone X, or get an iPhone 7 Plus – only one generation removed – in operable condition for $549. Simply put: if you’re willing to forgive a scuff or a scratch on the casing of an otherwise internally rejuvenated device, you can have an up-to-date phone for a deep discount.
It may sound too good to be true, but such deals can be yours. However, caution must be taken. Elizabeth Harper of DealNews.com warns that “refurbished” is different than “certified” (meaning that the phone has been test to ensure its good working order, but probably not repaired) or “pre-owned” (or used ouright).
Moreover, the very word “refurbished” can mean different things depending on who is doing the refurbishing, says Harper. If it’s the manufacturer, the product is more trustworthy because the work put into it is typically comprehensive. If a third-party, the work done on the refurb may not be as thorough. The more comprehensive work typically means a higher price, with minimal effort bringing lower prices.
Finally, there’s the issue of warranties. When buying refurbished, devices typically get a reset warranty: manufacturers like Apple and Samsung will typically give a one-year deal, while third-party suppliers may come with stingier coverage lasting 30-to-90 days.
Sure, there is risk, but purchasing refurbished can leave customers extremely satisfied. It’s not an option limited to phones – just about any electronic device can be had. In my case, I bought a refurbished MacBook Pro, a model from early 2011, in the summer of 2012. It had already been on the shelf for a year collecting dust, and here I am: writing this article on the very same computer. In fact, it has lasted more than twice as long as any previous computer I’ve owned. I took a gamble on this option it won me over. I’ll always consider buying a refurb from now on.
As long as you keep your wits about you and do your due diligence, great value can be had in the world of refurbished devices.
Prices courtesy of Newegg.com, current as of April 2018
42. Pricelist handelot
43. Logistics and Services on handelot
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