Apple's iPhone captures 81 percent of premium $600 smartphones in Russia

Posted:
in iPhone
Russia's smartphone shipments grew 6 percent in the first quarter of 2017, but premium smartphones (over $600) in the country grew by 143 percent over the previous year, and Apple captured 81 percent of those sales.




A report by Minakshi Sharma for Counterpoint Research detailed the difference between market share and value by noting that while iPhones accounted for 12 percent of units (second place to Samsung's 31 percent share), the two companies' combined 43 percent unit share captured 66 percent of the smartphone market by value.

Counterpoint's Niel Shaw clarified to AppleInsider that 60 percent of the +$400 phone market belongs to Apple, while the iPhone maker owns 81 percent of the market for phones that sell at iPhone prices in the +$600 segment. Samsung took just 14 percent of Russia's rapidly growing premium tier sales, but made up just over half of low end phones between $100 and $150.

The difficulty of competing against lower priced domestic phones and Chinese imports has resulted in Samsung working to sell basic Tizen phones in Russia as a cheaper alternative to Android.

Big shifts in unit share, less in premium domination

Last February, the firm reported that China's Lenovo and ZTE had rapidly passed up iPhones in unit sales with triple digit growth, pushing Apple into fourth place. However, a year later Apple is back in second place in Russia, while Lenovo and ZTE shipments fell harder and faster than Apple had (Lenovo's 11 percent unit share had fallen all the chart below 4 percent, while ZTE similarly fell from 10 percent share to just 4 percent.



Another Chinese player, Huawei, accounted for 9 percent share. Tele2, a domestic Russian brand, grew to account for 4 percent of sales.

Apple's lock on the premium phone segment Russia is also reflected in other markets. Last November, a report noted that Apple already achieved a 66 percent majority of premium phones in that country, after experiencing a 50 percent growth in sales during fiscal 2016.

Comments

  • Reply 1 of 14
    sdw2001sdw2001 Posts: 17,035member
    Another Russia story?  ;)  
    Solitallest skil
  • Reply 2 of 14
    If IDC/Counterpoint/any other XYZ market research firm can come up with similar statistics for ALL over the world, we would all be better informed while talking about smartphone sales. Sadly, we only get overall smartphone sales, not a breakup by segment (Flagship, mid-range, low-end). I am not suggesting that overall smartphone sales to be NOT reported. Just a breakup by one level down would do a world of good for analysts/public to understand the direction that smartphone industry is moving.
    watto_cobra
  • Reply 3 of 14
    SoliSoli Posts: 8,800member
    sdw2001 said:
    Another Russia story?  ;)  
    Fake News!
  • Reply 4 of 14
    rogifan_newrogifan_new Posts: 3,979member
    How many people in Russia can afford $600+ phones. 

    Seems to me there needs to be a healthy balance between market share and profits. This idea that you can only have one or the other is silly.
  • Reply 5 of 14
    jason98jason98 Posts: 763member
    Counterpoint's Niel Shaw clarified to AppleInsider that 60 percent of the +$400 phone market belongs to Apple, while the iPhone maker owns 81 percent of the market for phones that sell at iPhone prices in the +$600 segment.
    Pretty sure Apple has 100% market in the $969.00 segment for all 2 devices sold in this range. :)
  • Reply 6 of 14
    jbdragonjbdragon Posts: 2,110member
    How many people in Russia can afford $600+ phones. 

    Seems to me there needs to be a healthy balance between market share and profits. This idea that you can only have one or the other is silly.
    Who says you can only have one or the other? Market Share really doesn't mean much. Profits is what matters. All is playing the cheap phone razer thin profit game. Sell a bunch of them and make very little money. Why? Haven't you heard of work smarter not harder. When you go sell cheap phones, you devalue your own market and higher end phones. Why buy a $600 Samsung phone if I can buy a $200 Samsung phone? Samesung Makes $1 on that cheap phone and $100 on that high end phone. Whatever those numbers are. If Android sells 1 ZILLION phones and breaks even and Apple Sells 1 iPhone and makes a $50 profit. Who wins? If Android (That's everyone) sells 10 ZILLION phones and again still breaks even and Apple sells 10 iPhones and now made a $500 profit, again who's winning? Well a fandroid is going to say Android, they sold 10 ZILLION phones over 10 iPhones. Clearly winning the market share!!! Anyone with a brain will say Apple is winning, they actually made a $500 profit and only had to sell 10 phones to do it. Again working smarter not harder. This is basically what's happening now. Apple is making over 90% of the profits on Smart phone sales. Samsung makes most of the rest, around 10% and everyone else is either making razer thin profits or losing money. If Apple can get a greater market share at the same time, GREAT, but it would be really dumb to drop prices just to make more sales to gain market share. What does that get you? Profits is what keeps a company around. Profits allows a company to spend money on R&D. Breaking even or losing money will cause your company to go bankrupt. Or get acquired by some other company. What the market in Russia is for high end phones? I don't know. Is it any worse then in in India? There's a market for iPhones in India and there looks to be a market in Russia for the iPhone. Let Samesung have more market share selling a crapload of cheap phones. It makes them very little money. What do they get out of that?
    longpathwatto_cobra
  • Reply 7 of 14
    Rayz2016Rayz2016 Posts: 4,589member
    How many people in Russia can afford $600+ phones. 

    Seems to me there needs to be a healthy balance between market share and profits. This idea that you can only have one or the other is silly.
    Well, like everything it's a question of balance. If we've learned anything from Apple over the past twenty years then I think that market share is important, but what makes up that market is even more important.

    The people who can afford a  $600+ phone are also likely to be the same people who will buy applications from your developers instead of insisting that they get everything for free. They are the same sort of people who will be adaptable and move with the times, which is why they can afford a $600+

    Market share is important, but it's nowhere near as important as the quality of your customer base, otherwise Samsung's massive market share advantage would be reflected in their making more money than Apple, which they don't seem to do.

    The next thing you're going to say is 'Well, unless they start making phones for everybody then all this will come to an end.'

    Okay, but when?

    Give me a date; doesn't have to be exact; anywhere in a six-month ball-park will do.
    pscooter63watto_cobra
  • Reply 8 of 14
    SoliSoli Posts: 8,800member
    How many people in Russia can afford $600+ phones. 

    Seems to me there needs to be a healthy balance between market share and profits. This idea that you can only have one or the other is silly.
    I have no figure, but it's a lot. Remember how Apple changed the culture of personal computing. The iPhone is the quintessential post-PC device with users using their smartphone as their primary computing device so $600 for a pocketable computable is better than $600 for a Windows Notebook. Or, they just let the notebook languish so they can have the smartphone instead since it's increasingly used for fewer tasks.
    watto_cobranetmage
  • Reply 9 of 14
    jbdragon said:
    How many people in Russia can afford $600+ phones. 

    Seems to me there needs to be a healthy balance between market share and profits. This idea that you can only have one or the other is silly.
    Who says you can only have one or the other? Market Share really doesn't mean much. Profits is what matters. All is playing the cheap phone razer thin profit game. Sell a bunch of them and make very little money. Why? Haven't you heard of work smarter not harder. When you go sell cheap phones, you devalue your own market and higher end phones. Why buy a $600 Samsung phone if I can buy a $200 Samsung phone? Samesung Makes $1 on that cheap phone and $100 on that high end phone. Whatever those numbers are. If Android sells 1 ZILLION phones and breaks even and Apple Sells 1 iPhone and makes a $50 profit. Who wins? If Android (That's everyone) sells 10 ZILLION phones and again still breaks even and Apple sells 10 iPhones and now made a $500 profit, again who's winning? Well a fandroid is going to say Android, they sold 10 ZILLION phones over 10 iPhones. Clearly winning the market share!!! Anyone with a brain will say Apple is winning, they actually made a $500 profit and only had to sell 10 phones to do it. Again working smarter not harder. This is basically what's happening now. Apple is making over 90% of the profits on Smart phone sales. Samsung makes most of the rest, around 10% and everyone else is either making razer thin profits or losing money. If Apple can get a greater market share at the same time, GREAT, but it would be really dumb to drop prices just to make more sales to gain market share. What does that get you? Profits is what keeps a company around. Profits allows a company to spend money on R&D. Breaking even or losing money will cause your company to go bankrupt. Or get acquired by some other company. What the market in Russia is for high end phones? I don't know. Is it any worse then in in India? There's a market for iPhones in India and there looks to be a market in Russia for the iPhone. Let Samesung have more market share selling a crapload of cheap phones. It makes them very little money. What do they get out of that?
    So, what do you suggest? All OEMs stop manufacturing phones that cost < $600 AND manufacture phones which cost >=$600 ONLY? And do you think the world would be BETTER for it?
  • Reply 10 of 14
    rogifan_newrogifan_new Posts: 3,979member
    jbdragon said:
    How many people in Russia can afford $600+ phones. 

    Seems to me there needs to be a healthy balance between market share and profits. This idea that you can only have one or the other is silly.
    Who says you can only have one or the other? Market Share really doesn't mean much. Profits is what matters. All is playing the cheap phone razer thin profit game. Sell a bunch of them and make very little money. Why? Haven't you heard of work smarter not harder. When you go sell cheap phones, you devalue your own market and higher end phones. Why buy a $600 Samsung phone if I can buy a $200 Samsung phone? Samesung Makes $1 on that cheap phone and $100 on that high end phone. Whatever those numbers are. If Android sells 1 ZILLION phones and breaks even and Apple Sells 1 iPhone and makes a $50 profit. Who wins? If Android (That's everyone) sells 10 ZILLION phones and again still breaks even and Apple sells 10 iPhones and now made a $500 profit, again who's winning? Well a fandroid is going to say Android, they sold 10 ZILLION phones over 10 iPhones. Clearly winning the market share!!! Anyone with a brain will say Apple is winning, they actually made a $500 profit and only had to sell 10 phones to do it. Again working smarter not harder. This is basically what's happening now. Apple is making over 90% of the profits on Smart phone sales. Samsung makes most of the rest, around 10% and everyone else is either making razer thin profits or losing money. If Apple can get a greater market share at the same time, GREAT, but it would be really dumb to drop prices just to make more sales to gain market share. What does that get you? Profits is what keeps a company around. Profits allows a company to spend money on R&D. Breaking even or losing money will cause your company to go bankrupt. Or get acquired by some other company. What the market in Russia is for high end phones? I don't know. Is it any worse then in in India? There's a market for iPhones in India and there looks to be a market in Russia for the iPhone. Let Samesung have more market share selling a crapload of cheap phones. It makes them very little money. What do they get out of that?
    So everyone should make $600 phones and if you're in an emerging market and can't afford that well too bad so sad?

    Like I said there needs to be balance. Sell 100 phones @ $50 profit per phone earns you more than selling 10 phones @ $100 per phone profit. And you're just talking about hardware. What about other ancillary services that go along with hardware. If the iPhone SE helped to increase the iOS install base that's more people who might be buying apps, paying for iCloud storage or Apple Music. There's a reason Apple released a new 9.7" iPad at $329.
  • Reply 11 of 14
    brucemcbrucemc Posts: 1,527member
    How many people in Russia can afford $600+ phones. 

    Seems to me there needs to be a healthy balance between market share and profits. This idea that you can only have one or the other is silly.
    As the longest lasting personal computing company, the most profitable company, and the most valuable company - I would say that Apple has managed a pretty good balance.
    Solitallest skilpscooter63watto_cobrabadmonknetmage
  • Reply 12 of 14
    brucemcbrucemc Posts: 1,527member

    Rayz2016 said:
    How many people in Russia can afford $600+ phones. 

    Seems to me there needs to be a healthy balance between market share and profits. This idea that you can only have one or the other is silly.
    ...
    The people who can afford a  $600+ phone are also likely to be the same people who will buy applications from your developers instead of insisting that they get everything for free. They are the same sort of people who will be adaptable and move with the times, which is why they can afford a $600+

    Market share is important, but it's nowhere near as important as the quality of your customer base, otherwise Samsung's massive market share advantage would be reflected in their making more money than Apple, which they don't seem to do.
    ...
    Different companies have different strengths and abilities in a given market, and this will determine which segment in that market they are best to address.  Apple has, from day 1 of the company, targeted the high-end / premium within a given market.  They have approached this by trying to provide a differentiated experience with an integrated approach of hardware and software (and later broader ecosystem).  There were some ups & downs, but Apple has clearly proven that they can effectively dominate this top portion of the market, having done so with personal computing, music players, smart phones, tablets, and now wearables.

    Along the way, they have also shown that the premium end not only provides good profits from h/w & s/w sales, but also that these customers tend to spend more per user on the broader ecosystem.  So, they are the better customers here as well.

    Clearly, not everyone desires, or wants to pay, the prices Apple want to charge.  And there are no end of companies taking their strengths & abilities to fight for sales in the other segments.  This is the market at work.  There is nothing at all wrong with a company that knows it can't compete at the high end and wants to become an efficient low cost producer for the lower or mid segments.  Good on them.  They won't make the same margins, but they may do OK, and that is enough for their business.  Not glamorous, but someone will fill the need.

    The challenge for Samsung is how to continue to manage the diverse range from high-end devices more expensive than iPhone, to much less expensive.  It is challenging from a differentiation and brand perspective.  Apple has taken very careful steps to avoid this.  Once you go down market, it is hard to go back up.

    Those that advise Apple to abandon their premium focus for the sole purpose of growing share "because services" have a difficult time with numbers:
    - Profit from iPhones as currently selling are vastly higher than profits from services per user.  Services are the extra gravy.
    - Apple does not have an advertising based business - services are based on purchases - so going down market doesn't get the same quality of user who will spend as much on those services.
    pscooter63watto_cobra
  • Reply 13 of 14
    Dead_PoolDead_Pool Posts: 51member
    In Russia, phone buys you 
    watto_cobra
  • Reply 14 of 14
    longpathlongpath Posts: 223member
    jbdragon said:
    How many people in Russia can afford $600+ phones. 

    Seems to me there needs to be a healthy balance between market share and profits. This idea that you can only have one or the other is silly.
    Who says you can only have one or the other? Market Share really doesn't mean much. Profits is what matters. All is playing the cheap phone razer thin profit game. Sell a bunch of them and make very little money. Why? Haven't you heard of work smarter not harder. When you go sell cheap phones, you devalue your own market and higher end phones. Why buy a $600 Samsung phone if I can buy a $200 Samsung phone? Samesung Makes $1 on that cheap phone and $100 on that high end phone. Whatever those numbers are. If Android sells 1 ZILLION phones and breaks even and Apple Sells 1 iPhone and makes a $50 profit. Who wins? If Android (That's everyone) sells 10 ZILLION phones and again still breaks even and Apple sells 10 iPhones and now made a $500 profit, again who's winning? Well a fandroid is going to say Android, they sold 10 ZILLION phones over 10 iPhones. Clearly winning the market share!!! Anyone with a brain will say Apple is winning, they actually made a $500 profit and only had to sell 10 phones to do it. Again working smarter not harder. This is basically what's happening now. Apple is making over 90% of the profits on Smart phone sales. Samsung makes most of the rest, around 10% and everyone else is either making razer thin profits or losing money. If Apple can get a greater market share at the same time, GREAT, but it would be really dumb to drop prices just to make more sales to gain market share. What does that get you? Profits is what keeps a company around. Profits allows a company to spend money on R&D. Breaking even or losing money will cause your company to go bankrupt. Or get acquired by some other company. What the market in Russia is for high end phones? I don't know. Is it any worse then in in India? There's a market for iPhones in India and there looks to be a market in Russia for the iPhone. Let Samesung have more market share selling a crapload of cheap phones. It makes them very little money. What do they get out of that?
    So, what do you suggest? All OEMs stop manufacturing phones that cost < $600 AND manufacture phones which cost >=$600 ONLY? And do you think the world would be BETTER for it?
    I suggest that OEMs manufacture products that are sustainable, and not merely in the context of materials used in their construction, including consumables; but also products that can provide sufficient return on investment to justify software support to close vulnerabilities as they are discovered, instead of an extreme form of planned obsolescence. How many of these glorified burners do you think are actually properly decommissioned by safe e-waste disposal processes? Isn't it far more likely that these low end devices wind up in landfills?
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