Prague, 3 May 2007 – Sales of GSM mobile phones in Russia shrunk by 8.1% year-on-year to just under 30 million units in 2006, according to a new IDC study. By contrast, revenue increased by over 6% to $5.48 billion as the market shifted to higher-end phones. The already saturated market is expected to recover in the coming years, with midrange handsets playing a major role.

IDC attributes the decline in GSM handset sales almost completely to the maturity of the Russian mobile services market, where the number of SIM cards in use now exceeds Russia's population. "Russia is no longer a fast-growing emerging market as far as mobile phones are concerned,” says Simon Baker, Program Manager, IDC Russia. “Sales are expected to bottom out in 2007, and thereafter grow steadily but not dramatically, at a rate more akin to that of Western European markets, where replacement buying is now the norm.”

According to the IDC study, GSM dominated almost completely, accounting for nearly 99% of handsets sold last year. Nevertheless, retail sales of CDMA handsets rose by more than 41%, suggesting the technology has a dedicated, if small, user base.

The top three brands on the Russian market are Nokia, Samsung, and Motorola, whose combined market share exceeded 60%.

The IDC study identified the growing popularity of camera phones and MP3-enabled models. Phones with cameras gained 21.4 points in share to account for over 59% of all mobile phones sold in Russia in 2006. Those with MP3 playback capability made big inroads, too, comprising almost one third of all phones sold in 2006, up from fewer than one in five in 2005.

IDC expects a further dip in the market in 2007 with the first signs of recovery before the end of the year or at the beginning of 2008. Incremental growth in sales volume is expected across the five-year forecast period to 2011. The middle and upper-middle price segments will be the key sales categories throughout the forecast period, although the entry-level segments will remain important as well.

IDC’s Russia Mobile Phone 2007-2011 Forecast and 2006 Vendor Shares (IDC#EMH1P) analyzes and forecasts development of the market for mobile telephone handsets in Russia for the period from 2007 to 2011. The market is segmented by technology, price band, and geography (Moscow/Moscow region, St. Petersburg/Leningrad region, and the rest of Russia). Forecasts are made for handset sales by price category and region.

About IDC
IDC Provides Global Research with Local Content
IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 900 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 90 countries. For more than 43 years, IDC has provided strategic insights to help our clients achieve their key business objectives.

IDC CEMA
To cover Central and Eastern Europe and the Middle East and Africa, IDC employs 120+ analysts in a coordinated network of offices in 19 countries, with regional research centers in Prague, Moscow, Dubai, and Istanbul. Customers include a wide range of ICT hardware, software, and services suppliers, governments, and members of the financial community.

IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. Additional information can be found at www.idc.com.

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