FOCUS: Apple Watch may energize Russia’s market of smart wearables

By Yekaterina Yezhova

MOSCOW, Apr 27 (PRIME) -- Russian retailers are still unaware of the exact date of the arrival to the country of the Apple Watch, whose sales officially started on April 24 in nine countries, but pin their hopes on the device which will revive the nascent market of smart wearables.

“None of official retailers has received notifications from Apple on the date of a possible start of sales. This means that it won’t happen in the coming months,” Anton Spiridonov, editor-in-chief of Hi-Tech Mail.Ru, an expert project of Internet giant Mail.Ru Group, told Russian Connection.

“The company does not understand how large a demand for its smartwatches to expect worldwide, which volumes will be sufficient for Russia, considering the growing market of smartwatches, and whether investments will pay back or not.”

The Apple Watches could be expected in Russia in September–November by the time of presentation of the next generation of the iPhone, he said.

Official sales of the Apple Watch, with the lowest price at U.S. $349 for the Apple Watch Sport, opened in Australia, Canada, China, France, Germany, Hong Kong, Japan, the U.K. and the U.S. with preorders starting on April 10.

Loyalty of Apple fans and popularity of the company’s iOS operating system are high and is likely to be so in Russia, too. “The new device will find its buyers whom we can split into several categories: those who like Apple gadgets; aficionados of technical progress and extraordinary gadgets; and buyers for whom style is as important as functions of the device,” Mariya Zaikina, head of the press office of multichannel retailer Svyaznoy, said.

“When it comes to the Apple Watch and the impact of the brand on the smart wearables segment, we expect that the launch of the gadget will attract additional attention not only to the product, but also to the whole category of ‘smart’ accessories, and will spur the development of this segment both worldwide and in Russia.”

Electronic devices retailer ION Digital Center, working under the KNOW-HOW brand, expects 10% of Apple constant users to purchase the smartwatches.

“The Russian market of smartwatches is at an early stage of development and is characterized by poor variety of these devices. We think that the start of sales of the Apple Watch may become a turning point for the Russian market; the gadgets will serve as a driver for this segment and increase sales of smartwatches of other producers, such as South Korea’s LG and Samsung,” KNOW-HOW brand manager Roman Ashrafetdinov said.

Samsung and Japan’s Sony were pioneers on the Russian market of smartwatches, which has significantly widened thanks to the appearance of gadgets from B-brands. Spiridonov from Hi-Tech Mail.Ru said that Samsung and Sony still occupy about 50% of the market.

Zaikina from Svyaznoy said that the market of smart accessories, whose volume still lags far behind those of smartphones and tablets, is swelling at record rates.

“According to our estimates, some 250,000 smart accessories were sold in the country in 2014 that is 250% more than a year earlier. Dynamics of sales of such gadgets in Russia are overshooting global figures. We think that sales of such devices will show a three-digit growth in natural terms as of the end of 2015. This forecast involves the segment of smartwatches as well,” she said.

“In monetary terms, the domestic market of smart wearables stood at about 1.5 billion rubles. It’s only 0.5% of the market of smart gadgets – which includes smartphones, tablets and smart wearables – but it has a huge potential because of being unsaturated.”

Smartwatches are mostly purchased by owners of smartphones with a price tag of 10,000–15,000 rubles and more and are in focus of buyers of flagship models, Zaikina said.

Internet of Things

One of the main growth factors for the Internet of Things, a network of physical objects embedded with electronics and software, is a rise in the number of devices linked to the Internet. “In the last two years the Russian market of smartphones and tablets has been showing a double-digit growth, which is a huge potential for the Internet of Things market as a whole, including smartwatches and trackers,” Ashrafetdinov from KNOW-HOW said.

“Apart from the gadgets, there is demand for such devices as electronic scale with mobile applications, smart TV and action cameras, among others.”

Zaikina from Svyaznoy said that the dynamics of the Russian electronics market had been much higher than those of its European or U.S. peers, because it started developing later, but the current economic situation depressed purchasing power. Buyers behave more rationally and weigh the price and quality ratio.

“There is a trend of universalization of devices on the electronics market; smartphones and tablets replace various gadgets and reduce their sales. For example, tablets replace laptops, personal computers, navigators and e-books. Smartphones are multi-purpose devices replacing small photo cameras and feature phones,” Zaikina said.

Despite the trend, there are still people who buy personal computers, laptops and e-books, turning them into niche devices, because they opt for single-functioned gadgets and find them more comfortable.

(50.2473 rubles – U.S. $1)

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