Moscow, May 11, 2006 -- The Russian market for handsets was again robust in 2005. While growth slowed compared to 2004, shipments still climbed a vigorous 19% to just over 32 million units. According to IDC, the GSM standard accounted for more than 99% of handset purchases, with replacement buying and steady promotion of mid- and upscale models pushing up GSM shipment value by almost 21% to $5.15 billion. The market is however slowing quickly as the growth rate in subscriber net additions to mobile operators falls and IDC believes that the 2006 mobile phone market may end up smaller than that in 2005.

"Not only Moscow and St. Petersburg but also regional cities are now becoming mature markets," says Simon Baker, Program Manager, Mobile Handsets, IDC Russia. "The main trends are now related to upwards shifts in average purchase prices as replacement buying becomes key to the market."

The big news on the vendor scene was Nokia's jump from fourth to first in the rankings. Motorola dropped from first to third while Samsung remained in second and BenQ-Siemens held onto fourth place. Sony Ericsson had a strong year but remained in fifth position. Together, these five vendors represented more than 85% of shipment volume in 2005.

"A remarkably wide range of brands and models is available in Russia and market entry has been easier over the last few years than in many countries,” says Baker. “However, the market is now crowded and the minor brands are in intense competition to hold on to share as consolidation takes place." In Russia handsets are overwhelmingly sold independent of mobile operator user contracts and subsidies.

Entry-level models will remain important both in the big cities and in the provinces. At the same time, the increasing availability of consumer credit and replacement buying is shifting the emphasis in the middle of the market towards higher price categories, especially in Moscow.

IDC’s Russia Mobile Phones 2006-2010 Forecast and 2005 Vendor Shares, sizes, analyzes, and forecasts the market for mobile telephone handsets in Russia to 2010. The market is segmented by technology, price band, and geography (Moscow/Moscow region, St. Petersburg/Leningrad region, and the rest of Russia).

The study lists the top models and their market share for each price band and forecasts the handset market by price and region through 2010. In addition to information on major regional city markets, the study also analyzes the prospects for CDMA and UMTS handsets in Russia.

For more information, please contact Mikhail Novikov (+7 495 739 22 50; mnovikov@idc.com) in Russia or Tatiana Hinova (+420 221 423 140; thinova@idc.com) from anywhere else.

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