Price still holds sway for handsets

Newsroom 19/04/2010 | 11:19

Last year’s mobile handset market reached 5 million sold units. For the Romanian consumer, it’s all about the money. From a range of similarly-priced products, the brand, camera or video camera, media player and memory card will become factors, according to telecom pundits. Smartphones are performing increasingly well on the local market, while globally the smartphone is already spearheading the evolution of the handset into a complete device that encroaches upon computer territory.

Otilia Haraga


On mature markets, the decision to purchase a mobile handset is based on the product’s reputation, its multimedia functions and internet connection speed, says Oana Batusariu, product manager at Orange Romania. By contrast, the Romanian buyer, “due to the specifics of the market and the flexibility of demand, puts the emphasis on price when making the purchase decision,” she says.

But in terms of preferred functionalities, players say there is no difference. “Romanians’ consumption behavior does not differ from that of customers in other countries, and they have the same preferences, adding internet service to the list,” says Alexandru Munteanu, sales operations manager at Cosmote Romania. So Romanians will want their handset to include a touch screen, camera with a resolution higher than 2 MP, internal memory and memory card slot, MP3 player and Bluetooth.

Vodafone officials estimate the market of smartphones in Romania at having reached 400,000 sold units in 2009. And the models continue to proliferate at international level too. According to, which quotes an In-Stat study, smartphones are going to double their share of the mobile handset market worldwide in the next four years. Right now, smartphones still only account for about 10 percent of all mobile handsets sold. They’re popular with business users, but their cost continues to be prohibitive. However, this won’t remain the case for long, says the publication. Smartphones have captured the imagination of Romanian technophiles too in the last two years. “Over the last six months, sales of models promoted as part of the Orange My Smartphone offer have increased. Now they are 80 percent higher than in the first three quarters of 2009,” says Batusariu.

Cosmote Romania officials agree: “It is very likely that the smartphone market will see significant growth this year, so handset producers are planning to launch new models at accessible sums and cut the prices of models that have been on sale for some time.” This is also an important aspect for the operators who sell these handsets. However, although the smartphone is gaining ground, Munteanu says that in 2010, “Romanians will continue to prefer the laptop or PC for using internet services and programs for editing documents (such as Word, Excel etc.) The sales of smartphone handsets depend to a great extent on whether the operator subsidizes the cost, as well as associating these handsets with a mobile data service.” Meanwhile, the demand for luxury handsets on the local market has slumped, and as a result, the offer in producers’ portfolios has also thinned. The only producer that launched a handset in the luxury category last year was Motorola, with the Aura model.

“However, there are no indicators of change in this respect in 2010, and traditional producers will be rather cautious about launching high-end fashion models. An exception is Nokia, which launches the model 6700 Gold this year,” says Munteanu.


What do users want?

Leaving aside price, there are certain add-ons that most Romanian cell phone users look for. “The camera has remained the most used functionality of a mobile phone,” say Vodafone officials. Taking this into account, Vodafone is now offering, only as part of promotions, handsets that have at least a VGA photo camera, starting from zero cost for any two-year post-pay contract. For customers who want supplementary functionalities such as MP3 Player or memory card slot, Vodafone has included in its portfolio the Samsung C3050, which is on sale with the same conditions. “A new type of functionality that has started to gain more and more ground lately is the touch screen,” say officials. The best sold handset in this category for Vodafone is the Samsung Corby. At the low end of the market is the Vodafone 541, which starts from EUR 29, while at the high end there is the Samsung Galaxy Spica, the newest Samsung with Android operating system, which is available for EUR 69 (with VAT) as part of the post-pay offer Vodafone Complet 2000 and Unlimited Mobile Internet, for a period of two years. The operator also says that internet access has become extremely important for its customers with the launch of the Internet Opera Mini, which allows users to get online even from a cheaper handset.

The latest models launched by Vodafone are the BlackBerry 9700, Sony Ericsson Vivaz, Samsung Spica and Nokia X6. The mobile firm has launched a range of handsets under its own brand, of which the best sold is the Vodafone 533, a model with a 1.3 MP camera with video function, slot for the memory card, MP3 player and Bluetooth. This is closely followed by the Vodafone 541, the cheapest handset with a touch screen in the company’s offer, which sells for EUR 29 (VAT included) for Vodafone Complet post-pay deals taken out for two years. The operator also offers some models from other brands which it sells exclusively, including the Nokia 6730, Samsung S5600v and Sony Ericsson W715. In February, Vodafone exclusively launched what was billed as “the lightest handset”, the modu™

Among the criteria taken into consideration when a company decides to launch a portfolio of products under its own brand, there are “the competitive advantage that the launch of each model presupposes – and here one takes into account the segment which the product targets, the functionality of the model and the price, the brand power on the market and the cost-revenue parameters imposed by the entire process – the selection of the producer, quality tests, the commercial offer,” says Batusariu. Orange has not launched a range of products under its own brand, but has exclusive distribution of certain handsets. Its big hitters are the iPhone 3G and iPhone 3GS, on sale at EUR 79 (VAT included) within the My Smartphone offer, with a two-year post-pay contract.

Another exclusive model in Orange stores is the LG GW620, with an Android operating system, available as part of the same offer for EUR 69 (VAT included). The Sony Ericsson Jalou DG, which is a fashion model, is also among the phones sold exclusively by Orange. Mobile customers do not focus their attention exclusively on one model but instead gravitate mainly towards two price groups, says Batusariu. Among the best-sold high-end models, the iPhone model is out in front at a safe distance, but also interesting is the evolution of the model BlackBerry® Curve™ 8520. At the budget end of the spectrum, the main names are the Nokia 1208, Nokia 2330, Samsung E2120 and LG GB115. In Cosmote stores, as well as in the store of one of its main retailers, Germanos, the top-selling handsets are the Samsung S5230, Nokia 2700, Nokia 6303 and LG KP500, says Munteanu.


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