FOCUS: Smartphone sales in Russia grow in Q1, Apple keeps tight reins

By Yekaterina Yezhova

MOSCOW, Apr 18 (PRIME) -- The Russian market of smartphones kept growing both in monetary and natural terms in January–March, and Apple’s iPhones led the market, retailers said. Sales of feature phones and tablets contracted, and customers opt for spreading costs with small monthly payments.

“Smartphone sales jumped 34% on the year to more than 70 billion rubles in January–March. In natural terms, sales went up 7% to 5.8 million units. An average price grew 24% to 12,100 rubles,” Maria Zaikina, head of the press office of multi-channel retailer Svyaznoy, told Russian Connection.

Smartphone sales in 2015 in M.Video, one of the country’s biggest consumer electronics retailers by revenue, spiked 82% in rubles and 30% in units, the company’s spokeswoman Yulia Zotova said. An average price rose by 14% to 10,190 rubles.

The market and an average check swelled following higher sales of some models of smartphones and brands, in particular the iPhone, which secured most revenue in 2015 and at the beginning of the current year.

“iPhone sales in January–March exceeded market average by several times. Devices by LG, Asus and Lenovo were also in demand. All these brands are among leaders by the market share in rubles,” Zaikina said.

Sales of iPhone, Asus, LG and Lenovo smartphones jumped 20–125% on the year in natural terms, she said.

“One more reason of the year-to-year growth in January–March was the ruble’s tailspin at the end of 2014 that impacted demand in the first quarter of 2015: some demand meant for January–March 2015 was satisfied before the New Year holidays, and the market shrank afterward,” Zaikina said.

Client behavior

Economic turbulence has made people more frugal, including on spending on renovation of their devices.

“Customers have realized that the economic situation has changed for a long time, and people behave more rationally and think twice before buying a new smartphone. The price/functions ratio is in focus, and the trend is proved by sales of certain brands with a wide product range up to 20,000 rubles. Growth leaders are ZTE, LG and ASUS, whose sales more than doubled on the year in the reported period,” Zaikina said.

The only exception which bucks the trend is Apple. Clients still find an iPhone one of the most interesting among flagship “smart” devices. “The iPhone is one of the three most popular smartphones in Russia, and retailers’ revenue from these smartphones is still the highest among all brands,” Zaikina said.

Another trend mentioned by the retailers took shape in the second half of 2015 and protracted into January–March was payment in installments.

“While incomes contracted and prices increased, a one-time expense on a gadget to the tune of 30,000–70,000 rubles became too costly for clients’ wallets, and people find it more convenient to pay several thousand rubles per month during a lengthy period,” Zaikina said.

Zotova at M.Video also said that a growing number of people opt for installments for 12, 24 or 36 months that stimulates sales of devices with a price tag of more than 30,000 rubles.

From the point of view of operating systems, the situation remained unchanged. “Android led on smartphones and tablets with the share of 85%, while iOS and Windows Phone came next,” Zaikina at Svyaznoy said.

Feature phones

Sales of “classic” handsets traditionally shrink 20–30% per quarter.

“Feature phones still have quite a big share of the market with about 25% in total sales of phones, but the number of people preferring them is getting less. Such phones become niche devices used by seniors or clients happy with traditional options of a handset,” Zaikina at Svyaznoy said.

Zotova at M.Video said that sales of feature phones shrank 20% in rubles and 22% in units on the Russian market. “We have similar results in our chain as well. Clients prefer inexpensive smartphones with a wide range of functions instead,” she said.

Tablets

Demand for tablets kept falling as well in January–March. “Sales dropped 20% on the year to 10.9 billion rubles. In natural terms, sales plunged 26% to 1.1 million devices. An average price went up 10% on the year to 9,500 rubles. The price growth was milder than in smartphones thanks to multiple inexpensive devices,” Zaikina at Svyaznoy said.

“The segment of tablets was depressed by the economic situation and a constantly growing popularity of phablets, or smartphones with a screen of more than 5 inches.”

According to M.Video, tablets sales fell by a third both in money and in units, while the company’s sales went down 15% in money as it focuses on expensive devices and the decrease was less evident.

“An average price remained flat year over year at 9,000 rubles as demand moved to cheaper devices,” the company’s spokeswoman said.

(66.0452 rubles – U.S. $1)

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