FOCUS: Economic improvements push smartphone sales higher in Jan–Mar

By Yekaterina Yezhova

MOSCOW, Apr 17 (PRIME) -- Russian handset retailers enjoyed a continued increase in sales of smartphones in January–March, mainly by Apple and Samsung, which preliminarily rose by 8–9% on the year to 74.6–76 billion rubles amid stabilization of the economic situation in the country. Top sellers say the trend will stay in force through 2017 with phablets and 4G/LTE devices being the growth drivers.

“According to our first calculations, sales of smartphones in the country rose 9% to more than 76 billion rubles in January–March and by more than 10% in units to 6.5 million devices,” Sergei Tikhonov, a spokesman for multi-channel retailer Svyaznoy, told PRIME.

The figures provided by retailer Euroset are similar: smartphone sales went up 8% to 74.6 billion rubles, or 6% to 6 million units.

“We see that the market keeps recovering. Inflation has almost stopped, and the ruble has strengthened making the consumer more confident. Retail, in its turn, supports people’s demand with various marketing campaigns and installment options. Banks’ loyal policy towards consumer lending also stimulates a higher purchase frequency,” Alexandra Pertseva, head of PR at Euroset, said.

While Euroset said that an average price added 2% on the year to 12,400 rubles in January–March, Svyaznoy said that it went down 4% to 11,700 rubles, the first price decrease since July–September 2014 after an endless climb.

The country’s two biggest handset sellers agreed that Apple and Samsung were most in demand in the reported period. “Apple and Samsung still brought the biggest revenue to sellers among the brands present on the local market. They led by popularity as well,” Tikhonov said.

“Samsung’s success can be explained by its returning to retail chains, including Svyaznoy, which resumed its distribution in late January. iPhone sales continued rising faster than the average market in the first quarter.”

Some of the country’s leading handset sellers stopped purchasing Samsung smartphones and tablets in the middle of 2015 complaining of defective goods galore. Samsung, however, said less than 1% of its devices can malfunction.

Below is a breakdown of bestselling brands in January–March as provided by Euroset:

Leaders by money, Company	Leaders by money, Share, %	Leaders by units, Company	Leaders by units, Share, %
Apple	33	Samsung	25
Samsung	27	Apple	11
Huawei	7	Huawei	9
ZTE	3	Lenovo	6
Asus	3	ZTE	5

“Devices continued developing in adjacent niches: the share of phablets, marrying advantages of smartphones and tablets, is rising. In January–March, their share on the smartphone market advanced to 16% from 11% on the year in money and to 9% from 6% in units. The share of 4G smartphones widened to 88% from 72% in money, and to 65% from 42% in units,” Pertseva said.

In natural terms, Samsung and Apple led in phablet sales with market shares of 20%, adding 7 percentage points on the year, and 14%, adding 4 percentage points, respectively.

Chinese phablet brands followed: Huawei with 9%, adding 2 percentage points; Xiaomi with 8%, adding 8 percentage points; and Asus with 9%, losing 15 percentage points, Pertseva said.

“We expect that smartphone sales will gain some 10% in money and 5% in units as of the end of 2017 as compared to the previous year. These devices earned the ‘day-to-day goods’ status long ago and still play a locomotive role on the market of portable electronics, influencing all the neighboring segments,” she told PRIME.

“Phablets, measuring 5.5 inches in diagonal and larger, will push the market forward. As the high-speed Internet expands and a wide choice of 4G devices is present, their share will rise. Chinese brands will continue becoming stronger competitors for ‘old’ brands by offering more advanced devices at affordable prices,” Pertseva said.

Svyaznoy also expects smartphones to remain the most popular devices for communication and Internet surfing as the first screen for users in 2017.

“Dynamics of sales will be influenced by certain categories, like 4G devices and phablets, along with the replacement of feature phones. The return of Samsung on the shelves of major retail chains will also have an impact,” Tikhonov said.

 (56.2945 rubles – U.S. $1)

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