Hey.

Almost every day I come across opinions about which of the manufacturers is great, sells the most models and what kind of devices they are. The range of assumptions is so rich that your head is spinning. One person claims that Apple is unconditionally in the lead, another gives its voice to Xiaomi, then Honor appears, there are opinions about very small manufacturers. Every sandpiper praises his swamp, and it is almost safe to say that the one who claims to be the leader of Apple (you can substitute any name here), probably uses the product of this company. Unfortunately, the personal prevails over reality, which few people understand and, by and large, interesting. It’s akin to worrying about your favorite sports team.

In a short article I will try to give a snapshot of what is happening in Russia on the smartphone market, how well it feels and what to expect. So that we have something to build on, I note that retail sales per week range from 650 to 700 thousand smartphones. That is, more than 2 million devices are sold on the market per month in different price segments. To be precise, monthly sales range from 2.4 to 3 million units, the latter being typical for high season, for example, pre-New Year sales. Seasonality is gradually becoming a thing of the past, surges in sales in pieces are smoothed out, but in money, seasonality is clearly visible, for example, smartphones of higher value are bought on holidays than it happens during the year. This year, this will also be superimposed on the release of the iPhone 12 Pro in December, which will push this trend even higher. But in pieces, everything will remain exactly the same. That in a pandemic can be considered a victory, the market did not fall, as in many countries, remained in the usual parameters.

The main factors that influenced the market were several events. The first and most important is the closure of shopping centers, when large players could not open their stores and were forced to sell goods online. Many people assumed that the inhabitants of Russia would switch to the economy mode and would begin to approach their purchases more rationally. In late February and early March, everything happened exactly the opposite, sales of flagships increased significantly, the share of sales on credit and installments increased. There were two factors: on the one hand, large retail players realized that they would lose momentum at closing, and launched discounts on expensive models. As usual, they distinguished themselves as operators (MTS, MegaFon, to a lesser extent Beeline), but also such a major player as MVideo. On paper, the market grew significantly, which was perplexing, since there could not be such a volume of demand from consumers. The explanation can be found in the fact that an independent retailer bought these devices for further resale. Independent retailers continued to operate in quarantine, and as a result, their sales were good, as the total number of stores available to customers decreased. And this is another illustration of the fact that the economy for retail players can change with a decrease in the number of stores, the chains will be profitable again. And the operators have taken a course to reduce the number of stores, since there is no sense in maintaining unprofitable chains. In the coming year, we can expect that retail sales will decline by about 10%, with the main contribution made by operators (all except Tele2).

At the same time, MVideo and other major players have stepped up their investments in advertising, including online. That gave rise to interest in the category, and he has already supported sales for everyone. Surprisingly, everyone, from small stores to large chains, has literally benefited from this.

The key factor in the market is the availability of goods in Russia, the possibility of their shipment. In the spring, there were interruptions in the supply of Chinese smartphones, while for Samsung this problem was not observed. And this allowed to rock the market, take away the market share from Huawei / Honor. The process was gradual and took several months. But in the end, Samsung achieves this at the end of the summer, and then continues to increase its success.

In Russia, there was practically no helicopter money that was distributed to the population. Nevertheless, compensation for children was paid twice (10 thousand rubles each). This immediately affected sales in the segment under 10 thousand rubles, although this phenomenon was observed only in June and July, in August everything returned to the usual values ​​for each segment. The surge in sales was mainly due to the models Huawei, Honor, Redmi. But it was a short-term effect that did not last, a kind of bonus for the market.

The shares of manufacturers in Russia have changed dynamically, for example, Huawei / Honor is experiencing a shortage of goods, the market needs more supplies, but they are not. Due to the transition to HMS, the abandonment of Google services, the model range of companies has been greatly reduced, which affected the overall sales. Now Huawei is gradually increasing supplies and is trying to win back its share. The question rests on how much the sanctions will affect the ability to expand the model range, to supply the amount of goods that the market needs. It is impossible to predict this moment, since it is influenced by big politics and decisions can change very dynamically.

Samsung has a certain cyclical nature, the company loses market share, then includes marketing (in particular, trade-in) and, as a result, quickly gains share. Then plateau and repeat the cycle. At the moment, the company’s share is growing, as the line is balanced and interesting for the buyer, but more on that later.

The rise of Xiaomi in Russia is associated with the opening of branded retail, the presence of its own stores (managed by partners) gives a surge in sales, especially since the products are in demand, and these are not only smartphones, but also much more – smart home, small electronics. Also, partly Xiaomi has become the product that easily replaces Huawei / Honor. At the moment, the company is experiencing a shortage of goods (including the gray market, for which Xiaomi itself is not responsible).

Apple increased marketing costs to maintain its market share, it fluctuates in the range from 8 to 10%, the release of the iPhone SE did not become a lifesaver, there was no growth in market share, the model demonstrates weak sales in the segment of 40 thousand rubles and above.

Let’s take a look at the market shares in August 2020 in both monetary and piece terms.

The key trend of 2020 is the sliding of Apple’s share in monetary terms, the company fell from 38% of the market to 32%, while the negative trend continues. The release of the iPhone 12 in four models could partially stop the decline in market share in terms of money. But it is not possible to return the previous share.

In the segment above 50 thousand rubles, 99% of sales are occupied by Apple and Samsung, other companies account for the remaining XNUMX%, which looks insignificant. None of the Chinese manufacturers have been able to pave the way for the flagship segment, as their perception is completely different. Note also that both Huawei and Xiaomi sell a lot, but the average cost of their smartphones is significantly lower than Samsung. And it’s not a question that Samsung’s flagships are selling well, in many respects this is the success of the A-series, which sells well in the middle segment. To assess this factor, let’s take a look at the top ten best-selling smartphones in Russia.

The situation is repeated last year, when the Galaxy A50 became the best-selling smartphone in Russia among all models. This year the Galaxy A51 became such a model, this is the best price / quality ratio among all devices, which is proved by sales. Please note that the model is not the most affordable, the cost is 19 rubles for the 990/4 GB version or 64 rubles for the 22/990 GB version. This is not just a dominant model in its price segment, it is the best-selling smartphone in Russia, undoubtedly number one – 6% of the market on average. The result is unprecedented and indicates that people are increasingly choosing smartphones rationally, not chasing the minimum cost, choosing a smartphone for a longer period and with characteristics that look sufficient for them.

And also watch how this device carves the same 2020 iPhone SE into a nut, which costs twice as much.

Of the ten best-selling models in Russia, six positions are occupied by the A-series from Samsung, which is about 20% of the market. The result is not bad, especially considering that the most budget devices do not occupy the first lines.

The most popular iPhone in Russia today is the iPhone 11, and in the 128 GB version. It is also an attempt to choose the same value for money, brand orientation and willingness to overpay for it. The volume of sales of this device in retail prices is just over a billion rubles a week (1 rubles, to be exact), which is comparable to the sales of two versions of the Galaxy A007 – 345 rubles. But if you take into account the basic version of the iPhone 000, then the revenue will be on the side of Apple, there is no doubt about it. The second most popular iPhone in Russia is the XR; it sells from 51 to 1 thousand units per week. If you look at the position in sales, then it is not even included in the top 045 best-selling devices. In monetary terms, it is in the top twenty.

Short conclusion

You can write about the smartphone market endlessly, and it is impossible to grasp the immensity in a short article. This text describes some, but not all of the trends, highlights what is happening. Perhaps from time to time I will give such a view of what is happening so that you have an understanding of the alignment of forces, those events that affect the market. I took the most recent data that was available to me as a starting point. But I will definitely not publish such data all the time, do not expect monthly releases about it. Some roundings and simplifications do not affect the discussion of numbers, nor do they change the whole picture.

What more i can say? The market lives and develops, the crisis is felt on it, but everything is not as critical as it might seem to an outside observer. I hope that you also have a picture of how our market lives after this text.

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