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Apple's Russian partner to sell more iPods

18.12.2006
Apple IMC Russia, an independent marketing company that represents Apple Computer Inc. in the Russian Federation, made US$44 million selling Apple products through the retail channel (stores, retail chains, distributors working with retail chains) in 2006. This figure is expected to mount to US$106 million in 2007.

A new company called diHouse which has just spin off from Apple IMC Russia will manage retail sales of Apple PCs and iPod MP3 players. The latter is expected to become the new company's best-seller. Apple's partner has been promoting iPods in Russia since 2005, when the iPod boom started in Europe. Today, this MP3-player is indispensable in most Russian electronics chains. Apple's representative cooperates with 15 federal and over 50 regional chains and 6 distributors shipping iPods to smaller outlets.

iPod began to sell at the same moment when both consumer electronics and mobile telephone chains in Russia paid close attention to personal digital devices (photo cameras, players, pocket PCs). In 2006, the number of iPod official points of sale rocketed 10 times to 3700 stores. Together with the players, retailers are starting to sell accessories from third-party manufacturers.

Apple IMC Russia estimated that iPod won a 5 percent-share of the market of MP3 players with a flash memory or a hard drive in 2005. In early 2006, Apple raised player shipments to Russia securing further market share growth. iPod is expected to have captured at least 13 percent of the market, which is estimated at 1.7 million devices in 2006, by the end of 2006. In 2007, Apple IMC Russia is intending to control 18 percent of the market, raising MP3 player sales from 240,000 to 380,000 devices.

Such optimism comes from the current sales dynamics of digital devices in Russia. Consumers' preferences are shifting towards more advanced models. For example, sales of CD/MP3 players in Moscow and Saint Petersburg are tending to zero, and devices with an over 1 GB memory are controlling more than 50 percent of the market. The trends are the same in provinces, lagging slightly behind the two capital cities. Yet, the main growth is anticipated in provinces. In 2005, 40 percent of the market was concentrated in Moscow and in 2006, its share reduced to 35 percent and is continuing to decline.

An additional factor favoring MP3 player manufacturers is the PC market growth as it is impossible to load music onto a player without a computer. According to the local ICT-ministry, in 2006, the installed base of PCs in Russia has grown by 35 percent and totals 23 million units.