3G expected to drive mobile phone sales boost

2010 is expected to see a recovery in the mobile phone market with 10% sales growth after last years 24% sales slump.

After an era of strong sales, averaging 40 million mobile phones a year, 2009 saw Russian buy only 27 million. But Aleksandre Malis, CEO at Evroset, believes 2010 sales will jump, and that the key issue will be margins.

“We understand that in the past two years 10 million phones stayed on the shelves. But phones do get broken sooner or later and people will have to replace them. We will definitely sell more, the question is whether we will sell them cheaply or at a higher price.”

Russia’s top mobile retailer says the economic downturn has changed people’s attitudes, with mid range phones losing out. Those who have money buy expensive multifunction phones, and those who didn’t have much before the crisis now have even less, and are going for cheap basic models.

Mobile phone sales are expected to grow by about 10% this year with Sergey Savin from J’son & Partners Consulting, believing 3G technologies could be a big sales driver.

“Once consumer credit is restored and the situation stabilizes people will start spending on mobiles again. Also because mobile operators will be promoting 3G, people will need to change phones to use the new services.”

Interestingly enough, the downturn hasn’t diminished Russians’ taste for expensive models. Smart phones and communicators accounted for about 8% of total sales in 2009, and are set to grow in 2010, with demand for touch screen models also rapidly rising.