Russia Smartphone Sales to Stall on iPhone Slowdown, IDC Says

Posted in iPhone News by admin. Published February 17th, 2015

Russia Smartphone Sales to Stall on iPhone Slowdown, IDC Says

Smartphone sales in Russia are set to stall this year as Apple Inc.’s iPhone volumes decline while households bear the brunt of the blowback from the Ukraine crisis and falling oil prices, according to researcher IDC.

Sales of devices surged 46 percent last year in the country to 27 million smartphones and will remain at that level this year, Simon Baker, a Moscow-based analyst at IDC said in an e-mailed response to questions. “We expect Apple volumes to drop after the boom.”

Apple doubled iPhone shipments to Russia to 3.25 million last year, garnering $2.14 billion in sales, according to the researcher’s Worldwide Mobile Phone Tracker.

While Samsung Electronics Co. remained the market leader, shipping more than 6 million smartphones last year, its revenue share was overtaken by Cupertino, California-based Apple.

In the fourth quarter, when Russians rushed to spend their tumbling rubles on big-ticket items including premium handsets, iPhone sales reached $827 million, or a record 46 percent share in the Russian smartphone market, versus Samsung’s 18 percent slice, according to IDC.

“Cheaper Android handsets will undoubtedly do well this year as consumers cut outlays,” Baker said, declining to comment specifically on Samsung. Lenovo Group Ltd., LG Electronics Inc. and Sony Corp. increased their share in Russia last year, according to IDC.

Used Car

Apple raised prices by almost 70 percent in the final three months of 2014 to account for a weakening ruble compared with the U.S. dollar, while Suwon, South Korea-based Samsung avoided sharp increases.

“iPhone prices moved away from comfortable levels” after the ruble depreciation was fully translated, Alexander Malis, the head of Russia’s largest handset retailer Euroset Holding NV, said last month. “It’s hard for consumers to understand that a phone can cost as much as a used car.”

Russia’s economy is set to decline this year as depressed oil prices compound with the effect of U.S. and European sanctions over President Vladimir Putin’s incursion in Ukraine. Consumers’ real incomes are falling as a result of a depreciating ruble and rising inflation.

TABLE: Russian smartphone sales
     Units          Units       USD M    USD M
     2013           2014        2013     2014
Samsung         8,325,519     6,047,083    $2,388    $1,456
Apple           1,571,390     3,245,405    $1,078    $2,144
LG Electronics    561,707     1,063,544      $105      $239
Lenovo            569,630     2,216,947      $163      $417
HTC               931,095       852,149      $285      $234
Sony            1,074,997     1,585,836      $309      $425
Nokia           1,046,554     1,796,517      $326      $285
Others          4,732,778    10,666,381      $750    $1,121
Total          18,813,670    27,473,862    $5,405    $6,321

SOURCE: IDC Worldwide Mobile Phone Tracker



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