FOCUS: Number of smartphones in Russia rises, focus on B brands

By Yekaterina Yezhova

MOSCOW, Apr 4 (PRIME) -- The share of smartphones in Russia has exceeded 40% as the market was flooded with inexpensive and functional devices of B brands, or second-tier producers, mostly Chinese ones. Operators expect B brands to enjoy more success in 2016, including with their LTE devices as networks evolve.

“MTS had 77.3 million subscribers in its network as of the end of 2015. Smartphone penetration in the total number of registered handsets climbed 6 percentage points over the year to 48%,” the operator’s press secretary Dmitry Solodovnikov told Russian Connection.

“Mobile networks are getting filled with smartphones at high rates: sales of smartphones in MTS’s own network soared 50% on the year in October–December 2015 in natural terms amid the market’s fall by 14%.”

The company explained the growth of the number of smartphones by the policy of low prices for “smart” devices, which its retail business has been pursuing since April 2015.

A MegaFon spokesperson said that data-transferring gadgets – including smartphones, tablets and modems – accounted for 53% of all devices registered in its network.

The number of smartphones registered in the network of VimpelCom, known as Beeline, rose 19% in 2015, while the number of feature phones lost 3%, spokeswoman Anna Aybasheva said.

The share of smartphones registered in the network of the country’s fourth biggest cellular operator T2 RTK Holding, known as Tele2, rose 11.1 percentage points in 2015 to 40.9%.

The number of LTE supporting devices also rose along with the expansion of the fourth-generation networks.

“Smartphones were the main consumers of the mobile Internet in MTS’s network in 2015. Their share in traffic carriage went up 7 percentage points over the year to 39%,” Solodovnikov said.

“MTS had 7.5 million LTE-supporting devices in its network as of the end of 2015, and the number of active mobile Internet users doubled in 2015 to 4.3 million. Of the total, 99% of users of Internet services in 4G prefer this standard deliberately.”

Aybasheva at VimpelCom said that a growth of sales of smartphones and their penetration is stimulated by lower prices of devices, networks’ development, primarily LTE, and promotional activities. “We expect to see a higher interest in LTE devices in 2016,” she said.

According to Tele2, Moscow led by the number of 4G devices with penetration of 22.4%. Among the most popular phones in its 4G network were Apple iPhone 5S/5/6, Samsung Galaxy A3 and Lenovo A2010, the operator said.

The share of tablets in Tele2’s network stepped up 1.4 percentage points in 2015 to 2%. The highest demand was for Explay, Lenovo and Qumo. They were among the top five most popular models and accounted for 24% of all devices in the operator’s network.

In MTS’s network, the share of tablets edged up 1 percentage point to 11%, and the share of modems fell 8 percentage points to 37%.

The number of tablets in VimpelCom’s base rose 11% in 2015. The most popular were Irbis, Beeline-branded tablets, Oysters, Prestigio and Asus. In 2014, clients preferred Beeline-branded phones, Alcatel, Apple, Samsung and Lenovo, as the operator’s spokeswoman said.

Rise of B brands

MTS, VimpelCom and Tele2 pointed to a soaring number of smartphones and tablets of B brands, or smaller companies, like Fly and Lenovo, overshadowed by world giants, like Apple and Samsung.

“The share of owners of B brand smartphones registered in MTS’s network reached 28% and was followed by Samsung with 26% and Apple with 20% as of the end of 2015,” Solodovnikov said.

Tele2 said that one of the main trends of last year was a shift toward cheap devices by Fly, Alcatel, Explay and Lenovo. “We also saw growing popularity of such Chinese brands as Huawei and Keneksi, which approached the top 15 producers of mobile devices in Tele2’s network,” the operator said.

MTS expects in 2016 the popularity of B brand devices to grow, as buyers started to choose devices in 2015 by consumer features and the price with much less attention to the brand.

“For the first time on record, more than half of sold smartphones in natural terms were B brands. Their share in sales amounted to 59% in October–December 2015 and rose 10 percentage points to 55% in general over the year,” Solodovnikov said.

“Chinese B brands have used most the market situation to their best advantage: ZTE, Lenovo and others expanded their stake on the Russian market of smartphones in natural terms up to 36% in October–December 2015. In total, the share of sales of China-branded smartphones spiked to 29% in 2015 from 12% a year earlier.”

Operating systems

“Gadgets powered by the Android operating system continued to dominate the market in 2015. It overpassed iOS from Apple among users of 4G smartphones in July–December 2015 with 54%, but Apple occupied the same share on 4G tablets,” Solodovnikov said.

Android was used by 66% of smartphones in VimpelCom’s network in 2015 and iOS by 14%. Android tablets had 79%, while iOS devices – 20%.

In Tele2’s network Android smartphones occupied 80.7% and was followed by iOS with 7.1% and Windows Phone with 5.2%.

NFC

The number of devices equipped with the near field communication (NFC) technology, which allows devices to exchange data within a short distance, also increased.

“Penetration of NFC smartphones among VimpelCom’s clients soared 50% in 2015. We explain it by the growth of available services on the basis of this technology, a wider range of devices and lower prices,” Aybasheva said.

The share of NFC devices climbed 1.8 percentage points in 2015 to 4.8% of the total number of devices registered with Tele2’s network. Such devices were most actively used in Moscow and the northern city of Norilsk, the operator said.

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