According to the latest research from Counterpoint’s Market Monitor service, Russia smartphone shipments declined 12% YoY during Q2 2017 but grew 2% sequentially. With over 50 brands competing in the market, Chinese brands now capture over 25% of the total smartphone market while local brands share declined to single digits.

Commenting on the results, Associate Director, Tarun Pathak said, “Decline in smartphone segment was mostly due to seasonality and lack of offers from the retail side. However, premium segment almost doubled YoY thanks to push from retailers opting for credit and instalment schemes. This has helped Apple to reach double-digit market share in Russia smartphone market and maintaining its lead over premium segment, which it has led for the past couple of years.”

Mr.Pathak further added “Even though the entry-level smartphone segment declined by 50% YoY, the segment is estimated to return to growth during second half of 2017 as most of the first-time smartphone users are now coming from outside major cities in Russia. To target these users local and new Chinese players are tying up with the retailers with their affordable entry-level devices.”

Research Associate, Minakshi Sharma commenting on the competitive landscape said, “Xiaomi (+375%) & Huawei (+107%) were the fastest growing brands during the quarter. Xiaomi’s go-to-market strategy involved expansion in both online & offline channels which helped it to achieve growth within a year of its operations in the country. Huawei’s growth can be attributed to its strong channel presence and promotional offers during the quarter. However, even with Chinese players growing fast in Russia, Samsung is still able to maintain a significant lead over the competition due to its strong retail network.”

Market Summary:

• Russia smartphone shipments grew by 2% sequentially but declined by 12% YoY in Q2 2017.
• Samsung led both overall and smartphone segment with market share of 24% and 37% respectively during Q2 2017.
• During the quarter Samsung managed to resume the sales of its devices in leading mobile retail chains such as Euroset & Svyazony as well as on mobile operator Megafon which were earlier blocked due to quality dispute and repair guarantees between the Samsung and the retail chains.
• Apple maintained its second place with 10% market share during Q2 2017.However, 2/3^rd of its shipments are still contributed by older models. Huawei, Bright & Quick & ZTE were the other brands among top five smartphone brands.
• Global brands captured almost 60% of smartphone market and grew 10% sequentially during the quarter followed by Chinese brands with 27% market share.
• Xiaomi expanded its footprints during the quarter through its official distributor RDC. Xiaomi is also planning to open offline stores in major cities of Russia in coming year. Almost 25% of the Xiaomi sales during the quarter came from online channels.

• LTE capable smartphones contributed 76% of total smartphone shipments in Q2 2017. LTE smartphone segment in Russia grew by almost 28% YoY.

• MediaTek embedded smartphones contributed to almost 32% of total smartphone shipments while Qualcomm share reduced to 13% from 20% a year ago. However, Samsung captured almost 22% of the smartphone chipset market share during the quarter due to strong demand of its mid segment products.
• Almost 86% smartphones shipped during Q2 2017 were Phablets (>=5 inches) growing 5% sequentially.
• Mid end segment has largest number devices being launched with brands attracting users through offers like trade-ins, data bundling and higher memory capacity options for similar SKU’s

• Online channels contributed to almost 10% of the shipments during the quarter.

Exhibit 1: Russia Handset and Smartphone Shipments Market Share in Q2 2017

Source: Counterpoint Research Market Monitor Q2 2017

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Analyst Contacts:

• Tarun Pathak
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• Minakshi Sharma
  +91 999-991-1388
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