News Column

UAE - EMS just made the UAE's first smartphone

January 26, 2014

FME: So tell me the story of EMS.

"Our story is that we are a UAE company; we've been in the smartphone business since 2006. We are operating in 57 companies working with 100 mobile operators and we work with major brands. We are one of the largest structured distribution companies, and in addition to that we have a system integration arm that provides significant technical support. So mobility management, consulting and distribution. So this is, in broad terms, these are the two sides, and our vision is that we are a smartphone partner. Being a smartphone partner, the highest growth segment in the smart phone industry is Android. So in the Android space, we decided to have our own product, so we've been working on this product and it has been evolving over a period of time. It has been soft launched in many countries with different specs and for different price segments.

"We are owned by two local groups. So they have been in business for the last 50 years, EMS may be a seven year old company but those groups have been here forever. They are the UAE families.

"What we have to offer in terms of differentiation is the quality management of the product. We manage, we customize for local markets and work for the in country customization to customer requirements. And also the 360 degree support around it, which is fundamental. EMS is very well known in the region, and we have a fairly laid out warranty support program, so we offer an international warranty on this particular product. We currently have 14 countries in which we offer a warranty on this particular product. So if you buy from here you can go there, or there. And now the range of products which we are going to open today for the UAE is sort of mid-to-higher range in this particular segment. So the launch is perfectly suited for the UAE, and us being a hundred percent UAE company, this is a great opportunity with the UAE celebrating its 42nd year and our product coming along together. That's the story."

FME: So then, tell me more about what made you put it together. Was it always in your mind to get into producing your own hardware like this?

"This is an opportunity evaluation which we did a couple of years back. We spotted this as a high growth segment, and us being experts in this particular segment, we went for it."

FME: And you also distribute with Blackberry, right? That's always been a big partner for you.

" Yeah."

FME: Blackberry obviously has not been at its best as of late. Is this a reaction to that? Trying to evolve your business away from Blackberry?

"It's a different OS. Smartphones have different operating systems today. So it's a different OS."

FME: But is it part of diversifying your business? Putting your eggs in different baskets, so to speak?

"Not really. This is what we do for our customers. For our customers, we are their partners. So customers require all segments, and all operating systems. So this is a part of that."

FME: Did you find any skepticism for putting together such a product? The UAE and the Middle East isn't known for producing products like this. It's something novel to be doing it. Obviously you have the expertise, but do you find there's any skepticism in the market from a producer coming here? What are the challenges that you are trying to overcome?

"This is a standard product. It runs on Android Jelly Bean. It's a standard product. And I don't think that's an issue at all. We have a product that's been conceived here, customized here, managed here, and the manufacturing facilities are many in the world."

FME: Of course, but I mean that in public perception, everyone thinks of phones as coming from South Korea, Japan or China.

"Well yes, most phones are coming from one part of the world, the Far East."

FME: Do you think that there is room for companies to jump in?

"This is a huge segment. It's a mass segment. And this is a pyramid opening its layers. So as you continue to go down the price point and the feature phone is huge. Even a smartphone is looking at a billion units this year globally. So the feature phone is even below that. So what we're seeing now is the price coming from smartphone and feature phone is a sort of a merger there. And when more of that happens then the smart phone continues to go down, with the chipset price going down, and overall price points going down. Many analysts will go to the industry thinking that it is going to take the overall demand of global handset demand."

FME: But I find it very interesting, just to watch things evolve. When you watch someone like Samsung, the amount that they spend in advertising just to get their product out there, it must be challenging to compete. Not impossible obviously, but it's an interesting challenge.

"We all have our play. In product features, in price points, in market conditions, customer dynamics, so it's a huge space."

FME: What do you see as the real positive points to being an Emirati company?

"We have brilliant access to anywhere in the world. We have a lot of business in Africa, and we find ourselves to be in the privileged position to be here where we can connect with our African customers both physically in terms of flying from here or connecting. The logistics are excellent and the infrastructure are first rate, so we are connected to Africa, Asia, Europe, you name it. We are absolutely in the right place."

FME: How do you view the business world evolving in the future? Are you optimistic?

"Absolutely I am optimistic. I think this is the most exciting segment in telecom. Smart phones are helping operators grow their data portfolios, they are helping them address the issues in changing penetration from 3G to 4G, so I think we are absolutely in the right industry."

FME: Let's talk about your financial story. So you said that it was put together by these two Emirati groups? Did they provide all the funding privately?

" Yes yes, absolutely. "

FME: It was all private funds? "It's a private company."

FME: How much capital was put in to make this phone? How much was invested to make it happen?

"I think that numbers are not that important. We are a fairly large operation. We can support any level of growth whatever the market demand from us, we will be very comfortable in fulfilling those demands."

FME: But you don't want to get into the exact numbers?

" Yeah."

What's your strategy to continue growth in the next few years?

"To take a leadership position in this particular segment. We are going to go out and take a leadership position."

But how are you going to do it?

"Well, we understand the space very well. We have partnerships with a hundred mobile phone operators which are already customers, and it's not very difficult for us to go and tap that potential. And in this particular segment there is, in some countries, a lot of competition. In some countries, the competition is ok. We have the skill-set, knowledge, and financials to take the jump."

So you're working mainly with your partners to make this happen?

" We have a number of strategies. One is direct go to the market strategy, and then we have the strategy to go along with the operators in certain market. So we're working under a number of different parameters."

FME: So then, in Africa, how are you goingtodistribute?Doyouseethat as your biggest growth market?

"It perhaps would be, yes. That would be the right thing to say. We're already selling there."

FME: When did you launch the phone there?

"We started about nine months ago with a different product segment."

FME: Is it growing at your expectations?

"What we do really well is we have a huge focus on quality and deliverability. So we sort of build the foundations. That's the state that we are in. But it's better than our expectations."

FME: So then, you as the leader of the company, what do you see as your role to ensure that growth?

"I am the facilitator. That's what I do. It's to facilitate these guys to whatever tools they need in terms of resources, governments, HR, finance, everything."

FME: What's your leadership style?

"You should ask the people that work for us! [laughs] You can count me out of that. We are a very young company, so generally a lot of youngsters in the company, and we have an open door policy; very vibrant company."

FME: So then when you have a young company like that, it can be sometimes hard to really ensure there's proper corporate governance.

"No, corporate governance is something we take very seriously. Corporate governance is not relaxed, but our environment can be very relaxed. We have very stringent systems and policies in place and that runs on its own, but on the other hand our work environment is fairly relaxed and fun."

Would you ever consider an IPO?

"It's early days, who knows. We need to take our time."

How about regarding M&A, would you think of acquiring any international companies?

"We are very vibrant people and we are continuously on the lookout to do anything and everything. So we don't know what will come our way. Let's see what comes our way."

FME: Which banks do you work with in the country?

"All the banks. Most of them."

FME: What rate do you see regarding plans for the future on how often you will update the product?

" The product is regularly upgraded. It depends on availability of the operating software, chips and everything. There's a whole ecosystem that we need to follow. We have taken to the market also the feedback of what works and what doesn't work. So we'll see."

FME: Do you see yourself getting into tablets and other sorts of hardware?

" That's a possibility. That's definitely a possibility. We don't have it as yet, but it's something possible."

FME: What research did you do into design? Where did most of the R&D happen?

"We have a team of people whose primary function was to research."

FME: What do you think this distinguishes a product most?

"The support that it has, and the quality that we ensure."

FME: So just a fact that it has you guys behind it?


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Source: financeME

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