According to Svyaznoy, a major mobile retailer, the Russian smartphone market expanded by a whopping 78% in the first six months of 2011, reaching an estimated value of 30.7 billion rubles, or $1.1 billion. Sales for the period reached 2.8 million devices – a figure confirmed by MTS, a leading mobile operator and retailer – up 118% from the same period in 2010.
Sales of other categories of mobile phones decreased by 6% in value terms.
Smartphones represented just 18% of the devices sold by Svyaznoy, but accounted for 48% of its revenues. The figure will continue growing, according to company forecasts.
Over the last few years, the average smartphone price has gone down constantly. It fell by 19% to 10,831 rubles, or $388, during the first six months of 2011 compared to the same period of the previous year.
Russian mobile operators do not subsidize handsets, but they have begun retailing cheap smartphones – produced mainly by such Chinese companies as Huawei and ZTE – under their own brands, with discounts and additional services. For example, MTS has made its own brand low-cost MTS 950 available for just 4,990 rubles, or $179.
Meanwhile, Russians from larger cities are ready to spend significant sums on mobile phones. Consumers in Moscow and St. Petersburg say they are ready to spend more on a mobile phone than the European average ($270 vs. $236), according to a TNS survey made among 34,000 residents aged 16-60 in 43 countries.
The youngest age group among Russians, those between 16 and 21, declares itself ready to spend even bigger amounts, about $340.
The share of smartphone owners in Russia, however, is still two times less than in Europe and in the US. But over a quarter of Russians (28%) expect to buy a new mobile phone in the next six months, the TNS survey says.
Nokia falters, Samsung on the rise
Among the important trends revealed by Svyaznoy is the dramatic fall of Nokia’s market share, from 57% in Q4 2010 to 41% in Q2 2011 in value terms. Nokia sales have been hit hard by the growing popularity of Android, Svyaznoy analysts note. Nevertheless, Nokia is still brand number one in Russia. It dominates, in particular, the lower market segments – devices for less than 7,500 rubles or $260.
Samsung’s market share in value terms grew from 8% to 23% between Q4 2010 and Q2 2011. Apple’s share remained practically unchanged, from 16% and 15%. With the iPhone 4 priced over $1,100, Apple is the only smartphone maker not to have lowered its prices since 2010. With an elite positioning, iPhones continue to dominate the highest market segment of smartphones over 25,000 rubles, or $860, accounting for 84% of smartphones sold in Russia.
According to MTS, the broader Russian mobile market expanded by 18% to 76 billion rubles, or $2.72 billion, in the first six months of 2011, with 17.4 million units sold. MTS analysts note that the Russian mobile market has exceeded its pre-crisis volume – 16.5 million handsets were sold in the first half of 2008 – but revenues have yet to match the 91.3 billion rubles or $3.27 billion in pre-crisis sales.
These inverted trends can be explained by the falling average price for a mobile device – 4,362 rubles or $156 today – and fluctuations in currency exchange rates.
Source: Svyaznoy, TNS, Tdaily.ru, IKS Consulting
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Average smartphone price on the Russian market
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Smartphone maker market shares (in value terms)
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Smartphone maker market shares (in terms of units sold)
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Smartphone maker market shares (in terms of units sold, by price segment)
Source: Svyaznoy, July 2011
