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Sagem - official launching on the Russian market

Sagem announced that soon there would be official shipments of its phones to Russia. Such company as Dixis was chosen as a partner. Namely this trading company (both retail and wholesale) will officially distribute phones of this manufacturer in Russia. Actually Dixis receives exclusive rights to sell Sagem’s phones, i.e. price formation will mostly depend on the policy of one company. Absence of rivals can cause overpricing of the phones and hence affect sales. But it is early to discuss detail plans of the company, price policy is not formed yet, in the near future the company will try to sound out the possibilities of the market. The manufacturer takes a sober view of things and wishes only to enter the market, arrange work of the office in Moscow and acquaint potential buyers with the brand Sagem. They will hold an advertising campaign; most likely it will be based on the cooperation between these two companies (Sagem and Dixis). It is an attractive solution for a distributor, but we are not sure that is profitable for the manufacturer.

Warranty service will be provided by Dixis Service in Russia. Its director said that they could repair about 18 and 16 thousand of phones in Moscow and Saint Petersburg respectively. In reality none of the companies has so many broken handsets and real volumes are lesser. Nevertheless, warranty service centers in Moscow and Saint Petersburg have been already organized. It is not known yet how they will be developed in regions. We think that the problem of repairing will be solved.

It was mentioned in the press-release that Sagem is going to take the 8-th place on the Russian market in the second half 2004. The representatives of the company declared that according to their estimations a market share of the company would be 6-7%. We think that these estimations are not real. On the one hand, to achieve such results Sagem should overtake Philips and Panasonic. It is not an easy task, taking into account that these two companies hold an active policy on the Russian market today. On the other hand, we can make such assumption on the base of our estimations of the market 2004. We think that it will be about 16.5 million handsets (official shipments). Simple calculations showed that 6-7% mean more than 1 million of mobile phones per year. Even if competitors refuse to launch new models, these results are doubtfully achievable. It seems to us that Dixis would be able to sell 100-200 thousand of mobile terminals. The range is large, because it’s not obvious which product line Sagem will launch on the market; it could be considerably changed in the end of the year, as most of models are old-fashioned now.

Product range from Sagem 2003 in Russia

The company won’t show us many new models. Low-end phones are already known on our market (they were officially distributed by Astratelecom more than 1 year ago). We mean Sagem MW3020, MW3026. Sales of these models won’t be high and the company can’t rely on them.

X-series has more chances to be successful. Today it includes three models – X3, X5, X6. The eldest model – X6 is very attractive by its features, similar to Sony Ericsson T610. But the handset from Sagem has larger dimensions, it has problems with navigation (inconvenient joystick) and uncomfortable keypad. Soon we’ll publish reviews of both X6 and X5.

Middle segment is represented by Sagem X3. To say the truth it should be better positioned as an entry level phone, but it isn’t. During the presentation it was mentioned several times that Sagem had a full product line. We think that it is an exaggeration. There are too many old models, which are sold worse than others.

X5, which is equipped with a 256-color screen, is promised to be not a very popular model, taking into account that soon many cheap phones (130-150$) with the same features would be available on the market. X5 will be a very expensive phone and in our opinion it will be a niche model.

MY3088 is a low-end clamshell phone. It has usual design and no peculiarities. Surely, sales of this model won’t be high.

X8 will appear in the 3Q. It is a promising model – first clamshepp phone, which is opened at the angle 180 degrees. According to the company it won’t be broken even if you sit on it. In response to functions it is similar to X6.

In the conclusion we can say, that new brand is interesting for end user, as it gives more opportunities to him. We can’t say if Sagem will be successful in Russia, but figures mentioned by both companies (Sagem and Dixis) are rather doubtful. Probably in the near future the company could reach level of sales of such manufacturers as Maxon and VK Mobile. It will be difficult even to take the place of Philips, because it launches a new larger product range.

P.S. Reviews of the mentioned models will be soon published at our site. Firstly we’ll tell about the most interesting models – X5, X6 and then about cheaper ones.

Eldar Murtazin ([email protected])
Translated by Maria Sennikova([email protected])

Published — 20 May 2003

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