Mobile Phones in Ukraine

2021 DEVELOPMENTS

Smartphones continues to penetrate local households in line with greater demand for multifunctionality of digital devices

Demand for mobile phones in Ukraine continues to be driven by smartphones, with the latter continuing to develop in terms of functionality, offering convenience to consumers who increasingly rely on their smartphones for a wide range of attributes beyond making calls and messaging, including streaming or downloading digital content which is continuing to drive demand for larger screen sizes, uploading images to social media platforms and listening to music in conjunction with headphones or wireless speakers.

Further expansion of target audience for smartphones

Smartphones continues to penetrate local households by expanding its target audience. While initially driven by younger tech-savvy consumers, smartphones are increasingly gaining in popularity amongst older Ukrainians aged 60 years and older, in addition to children as young as six.

Leading players come under pressure from smaller competitors

Xiaomi is predicted to retain its overall leadership of smartphones in retail volume terms in 2021, although along with other major players in the category including Samsung and Huawei, as well as smaller previously dynamic names such as ZTE, Meizu, Doogee, and Homtom, it is set to lose ground to smaller players including OPPO Ukraine TOV and those collectively under “others” due to increasing price competition.

PROSPECTS AND OPPORTUNITIES

Smartphones to further penetrate local households but rate of growth will slow over course of forecast period

Smartphones are predicted to reach extremely high penetration of local households by 2022 in line with further dynamic retail volume growth. The category’s growth will be supported by further expansion of its target audience comprising a wide selection of the population in terms of age and socioeconomic background.

Further price competition to gradually erode average unit price

Although a stabilisation of the local economy in line with the waning threat of the pandemic in Ukraine will likely strengthen consumer sentiment and increase disposable incomes, value growth (at constant 2021 prices) of smartphones is set to record a weaker performance compared to volume over the forecast period due to predictions for a decline in the average unit price (at constant 2021 prices). This will be driven by further competition from smaller players, so while the category will continue to expand, this trend will also place pressure on the leading players which are likely to focus more on attracting mid- to higher-income consumers by offering greater functionality in terms of high-quality cameras or more powerful batteries to encourage upgrading.

Further notable declines for feature phones due to dwindling target audience

Over the forecast period, feature phones is predicted to continue declining in demand terms due to being increasingly replaced by smartphones. The target audience of feature phones will remain consumers aged over 65 years or older who do not require additional functionality beyond making phone calls although smartphones will also continue to attract this consumer group due to support from family members in terms of operating a digital device, resulting in greater confidence and understanding of its benefits.