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Nokia to open more stores in Russia

March 22 (Bloomberg) -- Nokia Oyj, the world’s biggest maker of mobile phones, plans to expand its own-brand stores in Russia over the next few years as part of its bid to hook consumers on services such as maps and music.
“We’re targeting potentially 120 stores in two and a half years to have good coverage of cities with 50,000 citizens and more,” Victor Saeijs, head of Eurasian sales for the Espoo, Finland-based company, said in an interview.
The number would include Nokia’s existing 40 stores in Russia, including its best-performing flagship store, in the Pushkin Square district of Moscow. The company is also working with carriers to sell services and work out data usage fees for smartphones on prepaid plans. OAO Mobile TeleSystems, Russia’s largest mobile-phone company, offered a three-month free data package with the N97 smartphone last year to encourage users to try out extras such as navigation and photo sharing.
“Unlimited data plans don’t really exist at the moment like you see in European markets but I have no doubt it will come and hopefully by the end of the year,” Saeijs said. “We’ll be working with the operators to stimulate them to do this because we know that’s the way to get a bigger services uptake.”
Nokia will introduce phones that can accommodate two different SIM cards, he said, confirming the company’s announcement at an investor meeting in December. Dual-SIM cards are a popular feature in prepaid markets where people may have numbers on different services to take advantage of deals.

Smartphone Growth

Industry average handset prices in Russia are expected to rebound in the second half of this year and 2011 after falling as much as 30 percent last year on the financial crisis, Saeijs said. As the financial crisis depressed phone sales, Russian mobile retailers consolidated into bigger chains, including stores run by carriers MTS and OAO VimpelCom.
The growth of smartphones will help the rebound, Saeijs said. Smartphones increased to 23 percent of total ruble mobile-phone sales in Russia in January from 14 percent last year, according to market researcher GfK.
Nokia will terminate its contract with one of its biggest Russian distributors, TeleLogistic LLC, at the end of June, because of the consolidation and what Saeijs said were “good reasons not to continue the contract with this particular distributor.”
Having its own stores permits the company to show a wider range of handsets and to demonstrate services, Saeijs said. The company opened stores in Perm, Rostov-on-Don, Krasnoyarsk and Samara this month, working with local partners.

Music Downloads

“It’s a very device-centric brand and we want to move toward being seen much more as a brand that brings devices, services and solutions to consumers,” he said.
Nokia has sold the most Comes With Music packages in Russia after it learned from rocky rollouts in other markets, Saeijs said, declining to give figures. Comes With Music bundles a handset with 12 to 18 months’ unlimited track downloads from Nokia’s music store for a flat price.
Russian buyers are downloading local music for 25 percent of their track picks and Saeijs believes that could double in a few months, supporting the company’s investment in deals with local labels. It’s now focusing on map services, where it has detailed information for 28 Russian cities, he said.
The so-called 8000 series or premium models, which included metal-toned slider phones, have worked to position Nokia as an “aspirational” brand in the Russian market, rather than a mass brand, Saeijs said.
Saeijs, a Dutch national who joined Nokia in 2000, has also sold consumer electronics in Russia for Philips Electronics NV.

Trusted Brand

Nokia is the most trusted mobile-phone brand for 53 percent of Russian consumers, according to a survey published this year by Reader’s Digest. That’s up from 44 percent three years earlier.
“Here in Russia, handsets still have a panache,” Philip Townsend, an analyst at Moscow-based brokerage Metropol, said in an interview. “For example, people who can’t afford a Mercedes and are driving around in some beat-up car will tend to go for go for upmarket handset. But they’re moving away from Nokia because handsets made by Samsung or many other makes as well are becoming much more upmarket and more widely respected.”
Nokia shipped more units than any other manufacturer in every quarter last year and increased its market share “nicely” in Russia in 2009, Saeijs said, rebutting a report by Moscow analyst Mobile Research Group that Samsung had overtaken the Finnish vendor in the fourth quarter.
“Whatever quarter you take in the last year, in volume and even more in value, Nokia’s the clear market leader,” Saeijs said. He declined to give figures.