PRESS: Russians’ interest in cheap smartphones declines

MOSCOW, Sep 1 (PRIME) -- The share of sales of inexpensive smartphones, with a price tag of below 3,000 rubles, in Russia decreased to 10% in July from 16% a year earlier, as they become less appealing to customers and less profitable for operators to subsidize them, business daily Vedomosti reported Thursday.

Sergei Tikhonov, a spokesperson for handset retailer Svyaznoy, said the segment of smartphones below 3,000 rubles started actively growing in 2013 and showed record figures in 2014, when the share of these devices in total sales was at 21%.

Exchange rates spiked in 2015 drawing the share down to 17% and then to 12% in January–June, Tikhonov said.

Yulia Dorokhina, a spokeswoman for mobile operator and retailer MegaFon, said the share of smartphones with a price of up to 3,500 rubles declined in 2016 in comparison to 2015.

Eldar Murtazin, a leading analyst at Mobile Research, said cheap smartphones are sold mainly at monobrand stores of cellular operators, as these devices are usually distributed under the companies’ brands.

Operators subsidize such sales to raise the number of consumers of the mobile Internet and the average revenue per user. However, companies have been recently turning down this practice, because it is unprofitable amid growing prices, the analyst said.

Tikhonov at Svyaznoy explained the decrease of the cheap smartphone market share by higher prices and movement of some models to upper price segments, as well as by a more demanding attitude of clients. People think a cheap device is not the most reliable and functional one and prefer more expensive models, he said.

(65.2535 rubles – U.S. $1)

End