Last year, the local market of mobile handsets posted sales of EUR 362 million, according to a GfK Temax report, and they were already in decline. The study found a drop of 4.5 percent in cell phone sales figures, mainly because prices fell worldwide. Paradoxically, the most substantial sales locally were registered in the fourth quarter of 2008 when the crisis on the international markets was already looming.
“Comparing the value of the fourth quarter of 2008 with the same period of 2007, the telecom sector remained relatively stable with a slight drop of 0.6 percent,” found the study. The report adds that although the sales of smartphones have strongly increased – this being a sector with a strong development pace in Romania – “the annual rate of value increase for the entire sector has remained negative, especially because prices have decreased both for mobile handsets and for smartphones and the RON has depreciated in comparison with the reference currency (EUR).”
“The market of high-end handsets is certainly a niche one, with a limited percentage of the total. The high-end segment typically means handsets starting from EUR 300, and is typified by models launched by Nokia, Samsung, HTC and Sony Ericsson,” Roxana Cocorel, sales development & support department manager at Cosmote Romania, tells Business Review. She says the percentage of high-end handsets sold in relation to total cell phone sales has remained constant, which means “the Romanian market has reached maturity and is comparable to other markets in the region.”
Players do not expect the users of such posh phones to start downgrading. “We do not believe that the customers who are accustomed to using highly efficient handsets will go for an inferior model, but will continue to buy those models that significantly facilitate their daily activities and allow them to keep in touch with what is happening at the office and communicate more
easily through the applications provided by the handset,” Mihnea Serbu, senior product manager at Orange Romania, tells Business Review.
Telecom operators generally collaborate with producers of mobile handsets in order to obtain the best quality-price ratio for the handsets they sell to the consumer. Prices are influenced by various factors, including the strategy of the producer, the commercial relationship with the operator and the geographical positioning of the country in relation to the logistic centers of the producer. The final price of a handset also depends on how far the operator is prepared to subsidize the phone, thereby passing on a discount to the user, says Serbu.
The sales of premium and smartphone handsets represent a sizeable slice of the total sales of Orange Romania. In 2008 there was significant growth on a wave of special offers and promotional campaigns. “For instance, Orange Romania sales of smartphones increased by 20 percent in 2008 compared to 2007, and we believe that future models, capable of combining e-mail access and internet services with multimedia functions, will continue to be extremely attractive to clients,” adds Serbu.
Equally, Vodafone Romania doubts sales on the high-end segment will be hit by the downturn. “In 2009, we expect an increase in the high-end handset segment of approximately 5-10 percent, despite a slight drop forecast in the total number of mobile handsets sold in Romania,” Andrei Oltei, manager of handsets at Vodafone Romania, tells BR. He attributes this prediction of growth to the falling prices of handsets, as well as the diversity of models on sale and increasing demand for the services that users can access on this type of phone. This includes functions such as mobile e-mail, internet, music and similar.
Over 80 percent of the exclusive handset models sold by Vodafone Romania were acquired by customers through the network of Vodafone's own stores.
Special offers are employed to make the phones available to a larger slice of the interested public. “We believe that these offers have made models in the high-end range accessible to more categories of customer and contributed to an increase in sales on this segment,” says Oltei.
This year, Orange Romania has introduced in its portfolio of products the BlackBerry Bold 9000 and BlackBerry Curve 8900, Nokia 5800 XpressMusic and Sony Ericsson Xperia X1. To date, the best sold models introduced last year include the Nokia (with models from the E series), HTC and RIM (the BlackBerry range) as well as the Apple iPhone 3G, which is popular for its browsing and multimedia capabilities.
Meanwhile, at Vodafone Romania, the best sellers include the HTC Diamond, BlackBerry Storm – an exclusive Vodafone model – Samsung Omnia and Nokia N96.
Cosmote Romania customers bought up the Nokia N95 8Gb, Samsung I900 Omnia maps and HTC Diamond. So far this year, the most popular models have been the Samsung M8800 and Sony Ericsson X1, says Cocorel.
What business customers most look for in a high-end phone is a touch screen combined with full QWERTY keyboard, mobile connectivity at high HSDPA speeds for better access to e-mail and internet, GPS, HSUPA, Wi-Fi and access to their company's business applications. Users in the consumer segment go for facilities such as a
generous display with a very good resolution, special multimedia capabilities (HD), good camera, rapid access to music and video services and a high data storage capacity.
By Otilia Haraga