The FINANCIAL — iPhone, called Invention of the Year by Time Magazine, is soon expected to make an appearance in Georgia. The FINANCIAL interviewed CEO of Hamaki LCC, Apple authorized dealer in Georgia, regarding the U.S consumer electronics multinational corporation’s development story in Georgia.
Q. Apple announced the iPhone in January 2007. The iPhone was introduced in the United States on June 29, 2007, with releases in the United Kingdom, Germany and France in November 2007, and in Ireland and Austria in March 2008. When will the iPhone, called Invention of the Year by Time Magazine, appear in Georgia?
A. iPhone is not yet available in Georgia. The countries you have named are the only ones where iPhone is officially available, locked to local cellular networks. Anything you find on the gray market in Georgia today is illegally modified using various hacks, crippled to the point that you cannot even update the iPhone’s firmware without having it relocked. These products are under no warranty support from Apple whatsoever.
Q. Apple has recently dropped prices for Georgia. Price drops range from 5-15%. What’s the main reason for why Apple decided to drop prices in the region?
A. Apple has maintained premium pricing for the CIS region for quite a long time due to relatively low sales figures. Since the sales have grown dramatically over the past several months, regional management has decided to further stimulate this growth by making Apple products even more affordable.
New iMacs now start at just EUR 1,399, laptops at EUR 1,179 and iPods at EUR 58. The new prices are effective as of April 14, 2008.
Q. When was the iPod fist brought to Georgia and what was the price of the first iPod?
A. In Georgia the iPod was first introduced in 2005, when GREENNET and Bank of Georgia launched a project called “MeloMoney”, offering iPods for just GEL 50 per month – it sounds ridiculous that they are available now for just GEL 16 per month, but back then it was a big deal – plus a special edition MasterCard (iCard) by Bank of Georgia.
Q. Which segments are iPods in Georgia mostly targeted at? Could you name any celebrities (businessmen, politicians) who have acquired Apple products at GREENNET?
A. iPods – I find it hard to name any celebrity that doesn’t own one. iPods are for everyone. 10-year-old kids to grandmas, everyone loves music! iPod offers the simplicity and ease of use that lets everyone, even the most technically challenged, use one.
As far as Macs are concerned, I take pride in the fact that many creative professionals are Mac users. To name a few – Niaz Diassamidze, The Green Room band, Aleko Tsabadze, recently awarded Russian Film Academy Award “Nika” for “The Russian Triangle”, even our president, Michael Saakashvili happens to own an iMac.
Q. How impressive are Apple laptop and other hardware or software sales? Please, name the best sellers.
A. Apple laptops are extremely popular. MacBook is the bestseller due to its good price/configuration ratio. All-in-one desktops – iMacs – are in great demand too. We expect MacBook Air – the world’s thinnest laptop – to beat all sales records once it becomes available. As far as software is concerned – the Mac OS X 10.5 Leopard is the bestseller so far, closely followed by some of the game titles.
Q. Apple has been represented in Georgia by GREENNET since 1999. Could you remember the top success highlights about the company since the very day of its foundation?
A. GREENNET started as a systems integrator in 1998 and the first milestone was Cisco Premier Partnership certification. GREENNET was the first to become a Cisco Premier Certified Partner in Georgia in 1999.
Apple division used to be but a tiny business unit at GREENNET, until it started to grow in 2005 with the introduction of iPods and then it was evident that the time had come to spin off and develop as a separate business. Hamaki was registered in September 2006.
Within a year we had a new store designed according to Apple Premium Reseller guidelines and doubled sales figures. Hamaki is currently the fastest growing business of the GREENNET group.
Q. Hamaki holds exclusive rights for distribution of Apple products in Georgia. The company has been operating through retail outlets of its own, as well as several dealerships. How different are Apple prices in Georgia compared to international markets?
A. Apple retail prices in our region are derived from the European ones. European prices differ from U.S. prices by the difference between the USD and EUR rate, while as in our region, local VAT (18%) is added to the European price. It may sound unfair, but that’s the way Apple distribution works. Example: if an iPod shuffle 1GB will cost you USD 49 in the U.S. (plus sales tax, depending on the state), in Western Europe it will cost you EUR 49 and in Georgia EUR 58 (EUR 49+18%).
Q. As for the name itself, how did you come to the idea of Hamaki (the word has an association of hammock if translated into English)? Does it have anything to do with Apple Macinstosh?
A. It only makes sense in Georgian, but of course it has everything to do with Macintosh. Hamaki translates not only as hammock, but also as “here, take a Mac”. We thought it was a good idea to add a slight twist to the company name, and it actually works the way we expected it to – it makes people smile.
Q. Are there any other Apple legal or non-legal dealers in Georgia and what are the measures you’d take in the case of some illegal dealers being revealed?
A. Most dealers are legal and work through our distribution channel. The major concern, however, is illegal import and distribution of unlocked iPhones. Apple keeps fighting this with frequent software updates that relock the iPhones and render them unusable, while we are doing our best to educate consumers on the disadvantages of owning such a product – no warranty, no qualified tech support, malfunctioning system, inability to update the software.
Q. What’s the overall amount of investments Hamaki has allocated in terms of expansion this year?
A. Hamaki currently operates one store located at 41, Irakli Abashidze St. By the end of the year we plan to open at least 2 more. We have invested around USD half a million in new store development this year, but we may go even further than that, possibly into the regions.
Q. Do you offer instant down payment services on Apple products and which banks do you cooperate with?
A. Yes, we do. Bank of Georgia and TBC Bank both offer 24-month leasing services, so the iPods are actually available at as low as GEL 16 per month, while Macs start at GEL 68 per month.
Q. In which other countries of the CIS does Apple operate official dealership offices in and what are Georgia’s shares in Apple turnover within CIS region?
A. Apple has official dealerships in every country of CIS. Russia, Ukraine and Kazakhstan are the largest markets for Apple, but Georgia and Azerbaijan show the fastest growth rate.
Q. How promising do you see the Georgian market for Apple and what are your expectations of 2008 sales?
A. I believe Apple has great potential in Georgia. Georgian consumers appreciate good design and premium quality, and Apple offers just that.
Written by Kate Tabatadze
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