Mobile TeleSystems Public Joint Stock : The Russian Smart Device Market in Q3 2021

At a global level, demand for smart devices remains at a historically high level as consumers around the world increasingly turn to digital solutions for work, study, and entertainment. In Q3 2021, MTS estimates the Russian smartphone market grew 24% year-over-year to reach some RUB 192 billion for the quarter. At the same time, the number of devices sold notched downwards (-4% year-over-year) to around 8.4 million smartphones, according to MTS's analysis. That reflected a continuation of the longer-term trend toward higher-end devices and longer upgrade cycles, with the average smartphone ticket price in Russia in Q3 2021 increasing nearly 30% year-over-year in ruble terms to RUB 23,000, on our estimates.

In line with those dynamics, the market for lower-end devices rapidly declined - Q3 unit sales of mid-low-end budget smartphones (RUB 5-10,000) declined by nearly a third year-over-year, and purchases of entry-level devices (< RUB 5,000) dropped precipitously by nearly 50% year-over-year, according to MTS's analysis. Meanwhile, unit sales in Russia of devices priced above RUB 40,000 sharply increased as buyers sought a more feature-rich user experience.

When purchasing a big-ticket electronics item, Russian buyers remain receptive to taking advantage of POS financing offers. MTS estimates slightly more than one-third of all smartphones sold in Russia in Q3 were purchased on credit, with an average price of financed phones significantly higher than for the market overall (around RUB 36,700). Financing offers were particularly attractive to younger consumers, with buyers under 30 accounting for some two-thirds of financed phones, on our estimates.

The most popular smartphones purchased on credit were:

Apple iPhone 11 128 GB
Apple iPhone 11 64 GB
Apple iPhone 12 128 GB
Apple iPhone XR 64 GB
Xiaomi Redmi 9 64 GB