Russia’s Mobile Phone Market Volume Returns to Pre-crisis Level but Prices Remain Keen

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Some spring shoots were visible in the Russian mobile phone market in the second quarter of the year, according to the latest IDC research.

Second quarter 2016 results from the IDC Worldwide Mobile Phone Tracker show imports were way up, compared with the same quarter of the previous year. Smartphone imports totaled nearly seven million units, against less than five million in the same quarter a year ago.

Natalia Vinogradova, senior research analyst with IDC Russia, notes that, since the fall in the value of the ruble in late 2014, distributors have taken a cautious approach to the market. “In the first three quarters of 2015, volumes were lower than before," she says. “At the same time, there was a marked move toward bringing in what, in dollar terms, have been much cheaper phones."

Market volumes in the second quarter of the year were up to levels seen before the drop in the national currency. The second quarter also saw a big jump in the number of 4G phones brought into the country, which accounted for more than half of the smartphones imported since IDC has been tracking this market.

“This proportion has doubled year on year,” says Simon Baker, senior program manager for mobile phones with IDC CEMA. He adds that the new wave of 4G phones are much more affordable. “The market average price paid for an LTE phone in Russia is now $189 – not much more than 12,000 rubles. Two years ago, the average price was $500. In fact, third-placed 4G Android brand Micromax, which is a big player in India, has pushed its average LTE retail price down below 5,000 rubles. Unsurprisingly, its sales are well up.”

Samsung, however, continued as the Android 4G market leader, while second-place Lenovo saw its share slip slightly.

Although shipment volumes have recovered, the overall value of the handset market is not regaining past levels, owing to lower sales prices. In dollar terms, the market in Q2 was worth $1.1 billion (at retail prices minus VAT) – in 2014, the equivalent figure for the same quarter was $1.4 billion.

Although distributors are expecting import volumes to continue at current high levels, IDC does not see the market value coming back up to former levels. This follows on the belief that Russia will remain a very competitive and price-conscious market, at least for the medium term.

About IDC

International Data Corporation (IDC) leads the ICT innovation discussion through events, research, and consulting. For nearly five decades, it has been giving ICT and business professionals data and insight for making strategic and practical decisions. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company.