iPhone is officially coming to Ukraine. Grey smartphones will have to step aside

Photo: Alex Solodunov

Since June 26 largest retailers starting official iPhone sales in Ukraine. Official distributor will be the company ASBIS, maker of smartphones and tablets Prestigio. According to the Deputy Director "Ukrchastotnahliad" Vladimir Kirichenko, the company filed an application for the importation of the first batch of iPhone S and iPhone C to about 1.5 thousand. in total at June 17.

The start of sales at ASBIS has not yet commented and asked to wait for the announcement. Note, until recently, the only official distributor of technology Apple (tablets, laptops) in Ukraine was of ERC. The fact that the market will be have the smartphones, its members prefer not to speak. "Rumors are rumors," - says the manager of the ERC Alex Dubov.

They have caught in the network

IPhone sales will hit the shelves of most major retailers. "Hello", "Citrus" and Comfy are preparing to sales.

Legal sales of iPhone handset are in the company’s plans, Executive Director of the Allo retail chain Valeriy Zolotukhin told Capital. If everything goes well with the agreement part of the project, iPhone will appear on the shelves already by the end of the month (June 26), he said.

“They will be 20% more expensive than the existing grey (semi-legal) iPhone handsets,” says Zolotukhin. Noteworthy, at the moment iPhone 5S is sold at online stores for UAH 7,700 – UAH 8,300 and iPhone 5C – for UAH 6,000–7,000. As the manager says, official sales imply the Apple warranty service for consumers, which is an important factor. “In addition to that, we will be selling iPhone on conditions of a beneficial loan,” he emphasized. By the way, in case of malfunction or breakage the purchase of an officially licensed telephone, replacement is guaranteed in accordance with worldwide experience. Although it is unknown how Apple will guarantee quality service repair on the territory of Ukraine. “We are experiencing difficulties with authorized service centers. Apple would be shocked if they learned who represents them here,” says Manager of UiPService Oleksandr Piterman.

A tenfold growth

In 2013 there were 0.9 mn active iPhone units in Ukraine, according to data provided to Capital by Piterman with reference to a Euromonitor International study. This year, their number is expected to double and there will be 8.6 mn iPhone units by 2018 (Euromonitor forecast). Marketing Director of the retail chain Citrus Viktor Sholoshenko estimates monthly sales volumes of all iPhone units in Ukraine at 100,000.

Zolotukhin is convinced that in a year or two, the prices for semi-legal and legal iPhone will remain as they are and the ratio of the units in sales will be approximately 10 to 90. Noteworthy, over the past three-four years the market of other brands of mobile phones has become “legal” and grey import accounts for a small part, largely thanks to the introduction of the system of its control by IMEI codes. iPhone was the last in line.

Operators won’t cope

To sell iPhone through mobile operators is a mission impossible at the moment in Ukraine. “In order to sign a contract with Apple, mobile networks must meet certain requirements,” specified head of Ukrtelecom Oleksandr Barinov. He says that in Russia 3G networks went through special certification. In Ukraine the largest cellular networks don’t even have 3G licenses.

In addition to that, obligations of the mobile operator as to the volume of sales are usually specified in the contract with Apple. There is a large grey market of iPhone gadgets in Ukraine. So, official vendors may simply not be able to fulfill their obligations under the contract. “I don’t know yet the conditions of iPhone, so I cannot comment on it,” said the new president of Ukraine’s largest telecom company Kyivstar Petro Chernyshov. “Sales of phones is not a business we specialize in,” said Head of the PR Department of MTS Ukraine Viktoria Ruban.

Apple conceded

Emergence of iPhone smartphone on the Ukrainian market is a logical step in the context of Apple’s global strategy. The company has decided to focus on developing markets, where, unlike in developed economies, the growth rates of smartphone sales are escalating, writes Financial Times. The smartphone market in developed countries has reached the stage of maturity and its growth rates are slowing down, according to Ericsson. Over the next year, the number of smartphones on them could increase by 30%.

Saturation of the European market influences the smartphone sales through leading mobile operators, which fell by a quarter in the 12 months to March, according to Financial Times. SIM-only contracts grew by 9 per cent, meanwhile, as more people moved from smartphone contracts to cheaper tariffs using existing devices. These trends are forcing Apple to focus on a more democratic sales model, through retailers.

A place under the sun

The Ukrainian smartphone market is growing annually by 50-60%. The share of smartphones in supplies has nearly reached 57% (33% a year ago), according to the analyst group IDC.

The absence of official sales and services of iPhone has played into the hands of Asia manufacturers trying to reinforce their positions in the country. For instance, in April the Taiwanese HTC named Ukraine as one of the key countries in the system of European operations of the company. This means that the new devices will be appearing in Ukraine simultaneously with their global launch and their price will be lower than on the European and Russian markets.

According to HTC assessments, the share of smartphones among mobile operators in Ukraine was 30-40% as of the start of the second quarter, while in Europe it exceeded 60%. “That is why we are now ready to invest into development of the Ukrainian market and have great hopes for the success of HTC among Ukrainian users,” said HTC Vice President for Eastern Europe and CIS Andriy Kormyltsev.

Now, Asian countries selling smartphones in the premium segment (from UAH 8,000) will experience some hardships after the emergence of Apple on the market, seeing as its iPhone remains the most popular device in Ukraine.