Economical Smartphones of Rami Levy: A Threat to Competitors

Sara Cunningham April 30, 2013 0
Economical Smartphones of Rami Levy: A Threat to Competitors

Now that Rami Levy began to sell Smartphones via an online store, several mobile phone industries had a huge uproar. The primordial reason is that Levy is selling them at lower prices. Of course, the mobile carriers will get angry as their prices will look terribly high when compared upon by customers.

Rami Levy’s Economical Smartphones A Threat to Competitors 2

Levy’s Response to Rivals

Levy’s has been just simple. He is living his motto to sell a lot and make a little. He even used this marketing strategy to sell goods in his supermarket as well as in his mobile communication packages. As for now, he also wants to employ his motto in selling Smartphones. His aim for Smartphones is competition in the sale of Smartphones. He also added that these handset units must be sold to consumers at affordable prices. Levy’s profit per Smartphone handset unit is only around 5% while his veteran competitors would earn 10%. There are also some who would earn as much as 35% per Smartphone unit. At such low prices, it is logical and reasonable to think that people would prefer to buy their Smartphones abroad.

Apple’s Move

After the announcement of such prices, there were reports that Apple Inc. requested the Tax Authority to investigate how Levy managed to sell iPhones at such low prices. Allegedly, they also asked to investigate whether or not the phones are contraband. However, some private investigation found out that there was no such move by Apple. Nevertheless, the Tax Authority still decided to an investigation such as examining Levy’s importing procedures. At the end of the investigation, Levy proudly announced that his import procedures are correct.

After this event, another report came out that the representatives of Apple are planning to meet Levy to scrutinize the possibility of business collaboration. However, it has been found an in a report that Rami Levy did not want to work directly with Apple since the company demanded from Levy the commitment to sell a huge quantity of its mobile phones. As of today, Levy’s sales were now close to 1,000 units including iPhones. This will not pose a problem if he will be asked to commit to sell such quantity.

Levy’s Response to Apple

However, it seems like Levy decided to pursue to sell such a low price since it is more important that the collaboration with Apple. He adds that it makes no difference in the eyes to the consumer whether or not the iPhone comes from unofficial or unofficial importer. As such, the mobile carriers are forbidden to open iPhone packages. Thus, they can install nothing on these mobile phones. Even the updates and Hebrew come directly from Apple. Neither it would matter to the consumer where the phone was bought nor the warranties offered by mobile carriers. As for the Tax Authority, they simply responded that they have been imposed taxes on the import of cell phones. They are prohibited to comment on a specific case.

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