Mobile TeleSystems : The Russian Smart Device Market in 2020

At a global level, 2020 year has been a year of unprecedented challenges. On the economic side, perhaps no sector has seen as much disruption as the retail industry. Long-term trends - such as the shift to ecommerce - have accelerated, and short-term operational hurdles have necessitated in-store PPE and contactless delivery. At the same time, connectivity has never been more important, and consumers have relied on digital devices more than ever before in 2020.

Against this backdrop, MTS analysts assess the Russian smart device grew around 14% in 2020 to surpass 570 billion rubles in overall revenue generated from around 31 million devices sold. That's particularly remarkable given broader economic headwinds as well as temporary store closures seen in Q2. The figures reveal a few notable trends:

1. First and foremost, social distancing drove a surge in ecommerce, with unit sales of gadgets through online channels up around 60% year-over-year, on our estimates. Online sales are commanding a greater share of the overall retail landscape, and while the pace of growth could slow, market watchers expect the overall trend to continue.
2. Second, Russian consumers continued to prefer higher-end, more capable devices: unit sales of budget models priced below 5,000 rubles fell some 15% year-over-year while unit sales of of models priced over 50,000 rubles saw extraordinary 40% growth, according to MTS analysts. This was reflected in the approximately 12% increase in average smartphone ticket price, which reached around 18,500 rubles for the year. And looking ahead, higher end device sales today often translate to greater data consumption tomorrow.
3. Third, Apple remained the market leader in revenue terms, with iPhones capturing around 36% of smartphone sales, followed by Samsung (28%), Honor (13.5%), Xiaomi (13%), and Huawei (4%). In unit terms, Samsung led the market with 28% of units sold, followed by Honor (21%), Xiaomi (19%), Apple (11%), and Huawei (6.4%).

Heading into 2021, one thing is clear: telecommunications is playing an increasingly vital role by providing the means for people to work, study, relax, and socialize - anytime, anywhere. At MTS, we are proud to be providing our customers with robust connectivity and next-generation devices to help keep them in touch, informed, and engaged in the modern digital world.