Tet-a-tet. Sergey Sobolev, MegaFon - about how the operator creates their devices

Not so long ago, in the tête-à-tête section, we discussed MegaFon Retail, touched upon the issues of how devices are sold in the MegaFon network, what operator retail is looking at. The conversation turned out to be interesting and detailed, at the same time the idea came up to give an inside look at how the operator creates their devices and why, when all manufacturers play “football”, they kick the ball and win by offering other rules of the game, going beyond the market.

That's why I went to visit MegaFon, to Sergey Sobolev, he heads the direction of mobile terminals and is responsible for their development at MegaFon. Everything that comes out under the MegaFon brand is in its direct introduction. Let's take a look at this kitchen from the inside.

EM. Serezha hello, let's immediately take the bull by the horns. How do products under the MegaFon brand appear? Why are they the way they are and not others?

After that, we make the final selection - we form a "short list" of suppliers. And at the next stage, we begin testing the work of prototypes on our network, after which we proceed to negotiations on the terms of the purchase. Our main focus at this stage is to get the lowest prices and best deals, while focusing on build quality and components. After all, getting a device at the output that will have good technical characteristics and the lowest cost is always a special challenge. Many do not believe that this is possible, but it is not. I will talk about this a little later.

And finally, the final step is preparing the product for launch on the market. Once again, we are carefully studying the competitive environment, finalizing retail prices, preparing packaging and instructions, which, by the way, we pay special attention to - after all, it is the main source of training in using the device. When we put our device on the counter, we must be sure that each customer will not have any problems getting the first experience with both the device itself and all its functions, as well as with mobile Internet.

Next - an advertising campaign and the start of sales. In short, the preparation process looks something like this.

EM. Then the question immediately arises why such a simple approach works for you, while other operators in Russia do not work out so well. Login played his game and changed the market, price segments on it. Operators are able to sell a device with zero margin, and if you look at the "big three" in Russia, then everyone is doing this, one way or another. But why only you became successful in this segment. What do you do that other operators don't?

Why other operators do it differently, I can't say. Perhaps they have different goals and objectives, this is a question for them. I will try to answer the way we see it.

I am sure that most operators have processes for preparing devices for launch, most likely, similar to ours. Only they buy dozens of devices, while we buy hundreds of thousands of them. Therefore, we can get the lowest prices - I'm sure all Mobile Review readers understand perfectly well what a volume discount is. There is an important difference - we should pay more attention to the processes of preparing the launch of devices on the market, because our risks are many times higher.

The line of smartphones and tablets MegaFon Login and three years ago, and today continues to turn the market. After the first smartphone, we released the first affordable tablets, which entered the TOP-3 of the best-selling devices of the past year. Now we have a new successful product - MegaFon Login+ phablet with a 5.5-inch IPS screen, good technical characteristics and a very good price offer in the current market conditions. This is the most balanced solution in terms of price / quality / reliability ratio. Every day I look at reviews of our devices and see that customers who bought a phablet feel they got more than they expected for its price.

EM. What is the situation on Login + now. There is a device in Moscow and the Moscow region, in some regions people complain that it is not on the shelves, they cannot find it and they say that it is a hoax.

We have about two thousand of our own salons and about the same number of partner salons throughout the country. From time to time there is a shortage here and there, despite the fact that we are trying to quickly replenish our inventory. But Login+ is indeed a very popular device. Despite the fact that they provided 100% of our retail, sometimes situations really arise when a hundred units of phablets were brought to the point of sale, most of them were already sold by lunchtime, and by the evening they were gone completely. I repeat, we are trying to provide the fastest possible logistics for all potentially scarce devices, but sometimes, unfortunately, you have to wait, especially in locations far from large cities. In this case, you can leave a request on the website or directly with the seller - and the client will be sure to be informed when the devices arrive from the warehouse to the point of sale.

EM. Hundreds of thousands of pieces, that's a lot for the market. When devices of the Login family appear, other players have to make the cost of their devices at the same level, or they are out of the market. With a difference in the purchase price, it becomes difficult and it turns out that your devices cost 1.5-2 thousand rubles cheaper. Huge difference, is this how you reformat the market? What happens to other players?

A large-scale launch of our products on the market results in price reductions by other manufacturers. And this leads to the fact that the number of available devices on the market is growing dramatically. This is our calculation.

Thus, when launching the first smartphone of the Login line in 2013, we noticed that the main reason for the low growth in smartphone penetration in Russia, despite the great interest of the audience in them, is their exorbitant price. Most smartphones, despite even simple configurations, were then worth a lot of money. And not every client was ready to pay a tidy sum for a device that, firstly, might not like it yet, and secondly, it is not clear why it is needed - after all, for most subscribers it was the first smartphone. We needed a shock device that would force the market to lower prices. And the first Login became such a device.

We do not have the task of making money by selling our devices, this is not our business. We just encourage other manufacturers not to be greedy and reduce prices for their products. Powerful players can afford it, other players are forced to look for other niches. But our task is to be on the client's side. We must make sure that all subscribers, with any income level, have the widest possible choice of available devices.

EM. Your end product is a communication service, telephones are not your product. You have taken on the mission to make devices more accessible and you are pushing the market down, the same Login is pushing the price segments down. And what happens after a while, how do you evaluate your actions?

We have a post-analysis of sales of all devices. For example, after the release of the first smartphone of the MegaFon Login line, we saw that the average cost of a smartphone with similar characteristics fell by almost 30 percent. This is very good, because it speeds up the process of replacing push-button phones with smartphones. If in 2012 - early 2013 the penetration rate of smartphones in our database was about 15%, now it is more than 40%.

If we look at the history of the MegaFon Login family of tablets, here we got results that exceeded our expectations: MegaFon Login 2 turned out to be so popular that it became one of the best-selling tablets in Russia. Last year, it was in first place in sales for three months in a row. As a result, as a result, manufacturers quickly and massively began to reduce prices for their tablets with similar characteristics, overall sales went up, this segment became massive.

Now the same story is being repeated with phablets. This is a new niche in the market - 2-in-1 devices that combine all the advantages of a smartphone and tablet. Due to the large screen size and its quality, such smartphones are optimal for using mobile Internet, watching videos, playing games, reading books, multimedia, social networks and many other tasks. On the other hand, they are compact enough to fit in a small purse or pocket without any problems. As a rule, such devices are flagships. Much less often you can find affordable phablets, there is something in the middle segment. Our task now is to make this product available to everyone.

EM. Speaking of Login+, are there many transitions from previous models? Is there such a statistic?

The bulk of buyers of phablets, as well as Login smartphones, are owners of "push-button" phones. At one time, we noticed that some customers would like to try smartphones, but they are stopped by a small screen - it is not always convenient to hit the keyboard on the screen or read books, watch videos. Login+ solves this problem.

But there are also customers who already use our smartphones and now buy a phablet. And there is a new trend in this: we see that there are customers who update smartphones or tablets, remaining within the Login line. It's about like with cars - there are always those who buy a new version of the same model every time. Why? Because everything suits.

In general, of course, devices from the MegaFon Login line most often become the first smartphones in life, the first tablets, and now also the first phablets. Many customers regard them as a great gift for parents and children. They are simple, affordable - a great option for "trying".

EM. For children, a good offer is an inexpensive phone that is not a pity to kill.

Honestly, we did not expect that children could become a large audience. We realized this only when, at the end of the school year (in 2013), we saw a sharp surge in sales - it was parents who bought smartphones for their children for good studies. Yes, it's great for kids. On the one hand, he really does not feel sorry for him - after all, children often lose or break something. On the other hand, it does not attract undue attention, it's not an iPhone, so you don't have to worry that it will be stolen or taken away. But still, design is very important for any audience, even in inexpensive smartphones. And we tried to make the devices of the MegaFon Login family uniform in terms of appearance and materials.

EM. That is, the devices look similar and this is done intentionally?

That's right. We developed the design based on feedback and our experience. In my opinion, the latest generation of Logins has the most a> balanced design among similar devices, both in terms of permanent use and in terms of aesthetics. Of course, you need to understand that you can’t please everyone, and besides, you have to remember about the cost of the device - a global change in production technology and form factors leads to a significant increase in cost. You always have to make a choice. But quality and reliability, in addition to a decent appearance, are the necessary attributes of modern budget devices.

EM. Can you elaborate on how you test your gadgets?

Each device we create goes through a whole set of tests, both at the factory and in our place: from software tests to physical “bullying”: phones are dropped from different heights tens of thousands of times, bent, heated and frozen in climatic chambers. For example, one of the settings shows how quickly the screen or case is erased. This is a drum into which keys, change and other small items are placed, then it is spun throughout the day, almost like in a washing machine. If we find any significant defects, then work begins to eliminate them. In St. Petersburg, we have a laboratory that conducts similar tests for the acceptance of devices already on our side. There is also a software check of devices for the quality of their work in our network.

EM. But this does not guarantee that the devices will always work? No one is safe from marriage, and for sure people come to you and say - this and this do not work for me, replace my phone. How often does this happen, do you fit into the traditional 2 percent marriage?

Marriage is present in all manufacturers without exception - from space rockets that put satellites into orbit, to disposable tableware. The current defect that we fix at home is less than the one that we fix by selling products of B-brands.

As I have already said, the quality of our devices is under special control and has the highest priority: after all, they are sold under the MegaFon brand and we bear image risks. For us, a high percentage of marriage would be an emergency. It is important for us that the devices work for a long time and with high quality, and the client could use the device in full for as long as possible. There is no task for a subscriber to buy a new, say, smartphone from us in a year. We do not aim to become a manufacturer and gain market share.

EM. If you look at how the Login line has evolved, you can see that from generation to generation, the amount of additional software in devices has decreased. In the first generation, there were three browsers (native, yours and from Yandex), several application stores. Today, the number of programs with duplicative functions has been drastically reduced. Now everything has become much clearer. Is this a conscious decision to make things easier?

Your question already has an answer. Yes, it's a conscious decision. For most buyers, the MegaFon Login smartphone is the first smartphone in their life, and the mobile Internet is a wild, uncontrollable beast. Therefore, we decided to simplify the task of entering this world as much as possible. We decided not to completely abandon presets, since many customers simply do not know how to use app stores. Today, our devices still have the main, most popular applications, as well as useful applications that can help in the operation of devices - antivirus, an application to improve performance, MegaFon's Personal Account, and so on.

EM. Now there is a discussion on the market that Yandex complains that it is supposedly not allowed to be installed on B-brand products, do I understand correctly that you yourself choose who to work with and what programs to install on your devices? Do you have any restrictions, do you have freedom of choice?

Absolute freedom. No one comes to us and does not indicate what to put. We are guided by what our subscribers want to see. All such decisions are made not “by eye”, but on the basis of figures that are formed from research.

The market is developing and we are with it. At first, we put many different applications on our devices, assuming that the more, the better. Now everything we bet is dictated only by the requirements of the market. And the requirements have changed: some customers want everything to be simple and clear. Another part of them are experienced users who are able to customize their new smartphone on their own.

EM. Let's get back to manufacturing in China. Today, many companies, including those with no experience in making devices, can go to factories and buy something, believing that they will be successful in this. Do factories single you out in some way, give you preferences? Due to volume, due to how you buy? You have a rigid approach to the price and they may not like it, it is more profitable to sell more expensive, but in smaller lots.

From their point of view, there are two key indicators - production and income. When an operator and some small player come to them, then, perhaps, in terms of a unit of goods, the income will be higher from a small customer. But in terms of the total volume, it is certainly more profitable to work with a large buyer. And most often it turns out to be the operator. In addition, the operator may still return with the order. Therefore, it is beneficial for the factory to give the best offer and receive guarantees of further cooperation, positive experience - after all, China lives off of such production, there is a lot of it. But there is one more point. Factories buy components, what any device consists of. The more components they buy, the more discounts they get. We had a case where a factory sold us a device for almost zero margin. They still benefited from it, as they increased production volumes. The next time they provided us with much better conditions compared to the competition. They went to another level, were able to show their partners that they are a serious player and got the maximum discounts.

It also plays into our hands that 90% of devices in Western markets are sold through operator retail, i.e. they are purchased by the operators themselves. These are major players and working with them is a certain level for factories. Therefore, historically, the attitude towards operators is much better than towards a nameless wholesaler.

EM. There is often an opinion that you can get a more competitive price for a phone or tablet from B-brands than create your own, because due to tests and other operations, the time to market is delayed. Other operators go this way with other people's products. Why don't you go like this?

In our own retail, there is a sufficient number of smartphones and tablets from B-brands. There are a lot of them today and that's good. We do not plan to release dozens of smartphones or tablets under our own brand. Let the assortment of salons be formed by other manufacturers. We care about the price on the shelf. To do this, we make one quality product, which, again, reduces prices on the market. From the position of the operator, keeping track of one product is much easier than following a dozen models with small circulations. Offhand today I see several promising niches where our devices could appear. Most likely, they will appear there very soon.

Afterword

I am sure that for many this text will seem strange. Well, how else! When manufacturers are fighting for market share, MegaFon plays a completely different game and wins time after time, selling its devices in hundreds of thousands of copies. The success story of the products of the Login family is amazing, because the operator approaches them with a completely different standard, does not seek to sell them a lot, and as a result sells huge circulations. I think that the secret of success that we have revealed in this material is simple to disgrace - they think about other things that appeal to consumers and make products attractive. While others compare specifications and prices against each other, MegaFon sets the minimum price for decent quality and pushes the market towards cheaper products. What makes the devices more accessible to a wide range of consumers, so that the services of any operator are in demand by a large number of people. This also has a business component, they are not dreamers at all. But you must admit that they do it well and beautifully.

Tet-a-tet. Sergey Sobolev, MegaFon - about how the operator creates their devices

Not so long ago, in the tête-à-tête section, we discussed MegaFon Retail, touched upon the issues of how devices are sold in the MegaFon network, what operator retail is looking at. The conversation turned out to be interesting and detailed, at the same time the idea came up to give an inside look at how the operator creates their devices and why, when all manufacturers play “football”, they kick the ball and win by offering other rules of the game, going beyond the market.

That's why I went to visit MegaFon, to Sergey Sobolev, he heads the direction of mobile terminals and is responsible for their development at MegaFon. Everything that comes out under the MegaFon brand is in its direct introduction. Let's take a look at this kitchen from the inside.

EM. Serezha hello, let's immediately take the bull by the horns. How do products under the MegaFon brand appear? Why are they the way they are and not others?

It all starts with studying the market and needs, as a result of which we find the most demanded niche in the field of devices.

When we see a need, we begin to prepare a technical description of a new device, taking into account the capabilities of manufacturers and customer requirements. Perhaps this is the most important and difficult stage, because the cost of a mistake is quite high, since we buy large batches of devices. If they are not in demand, the company will suffer losses.

The next step is to work with software developers, manufacturers of various components - from chipsets to cases, assemblers and many other suppliers and partners - companies located in various parts of the globe. We have a huge portfolio: more than 300 different partners. We always communicate directly with factories, as the quality of the device depends on how production and assembly are arranged. We exchange experience with operators in other countries to make sure that the selected partners are conscientious, that they have a history and it is 100% positive. After all, our main condition when working with factories is high quality requirements and strict production control, including random checks at all production stages.

After that, we make the final selection - we form a "short list" of suppliers. And at the next stage, we begin testing the work of prototypes on our network, after which we proceed to negotiations on the terms of the purchase. Our main focus at this stage is to get the lowest prices and best deals, while focusing on build quality and components. After all, getting a device at the output that will have good technical characteristics and the lowest cost is always a special challenge. Many do not believe that this is possible, but it is not. I will talk about this a little later.

And finally, the final step is preparing the product for launch on the market. Once again, we are carefully studying the competitive environment, finalizing retail prices, preparing packaging and instructions, which, by the way, we pay special attention to - after all, it is the main source of training in using the device. When we put our device on the counter, we must be sure that each customer will not have any problems getting the first experience with both the device itself and all its functions, as well as with mobile Internet.

Next - an advertising campaign and the start of sales. In short, the preparation process looks something like this.

EM. Then the question immediately arises why such a simple approach works for you, while other operators in Russia do not work out so well. Login played his game and changed the market, price segments on it. Operators are able to sell a device with zero margin, and if you look at the "big three" in Russia, then everyone is doing this, one way or another. But why only you became successful in this segment. What do you do that other operators don't?

Why other operators do it differently, I can't say. Perhaps they have different goals and objectives, this is a question for them. I will try to answer the way we see it.

I am sure that most operators have processes for preparing devices for launch, most likely, similar to ours. Only they buy dozens of devices, while we buy hundreds of thousands of them. Therefore, we can get the lowest prices - I'm sure all Mobile Review readers understand perfectly well what a volume discount is. There is an important difference - we should pay more attention to the processes of preparing the launch of devices on the market, because our risks are many times higher.

The line of smartphones and tablets MegaFon Login and three years ago, and today continues to turn the market. After the first smartphone, we released the first affordable tablets, which entered the TOP-3 of the best-selling devices of the past year. Now we have a new successful product - MegaFon Login+ phablet with a 5.5-inch IPS screen, good technical characteristics and a very good price offer in the current market conditions. This is the most balanced solution in terms of price / quality / reliability ratio. Every day I look at reviews of our devices and see that customers who bought a phablet feel they got more than they expected for its price.

EM. What is the situation on Login + now. There is a device in Moscow and the Moscow region, in some regions people complain that it is not on the shelves, they cannot find it and they say that it is a hoax.

We have about two thousand of our own salons and about the same number of partner salons throughout the country. From time to time there is a shortage here and there, despite the fact that we are trying to quickly replenish our inventory. But Login+ is indeed a very popular device. Despite the fact that they provided 100% of our retail, sometimes situations really arise when a hundred units of phablets were brought to the point of sale, most of them were already sold by lunchtime, and by the evening they were gone completely. I repeat, we are trying to provide the fastest possible logistics for all potentially scarce devices, but sometimes, unfortunately, you have to wait, especially in locations far from large cities. In this case, you can leave a request on the website or directly with the seller - and the client will be sure to be informed when the devices arrive from the warehouse to the point of sale.

EM. Hundreds of thousands of pieces, that's a lot for the market. When devices of the Login family appear, other players have to make the cost of their devices at the same level, or they are out of the market. With a difference in the purchase price, it becomes difficult and it turns out that your devices cost 1.5-2 thousand rubles cheaper. Huge difference, is this how you reformat the market? What happens to other players?

A large-scale launch of our products on the market results in price reductions by other manufacturers. And this leads to the fact that the number of available devices on the market is growing dramatically. This is our calculation.

Thus, when launching the first smartphone of the Login line in 2013, we noticed that the main reason for the low growth in smartphone penetration in Russia, despite the great interest of the audience in them, is their exorbitant price. Most smartphones, despite even simple configurations, were then worth a lot of money. And not every client was ready to pay a tidy sum for a device that, firstly, might not like it yet, and secondly, it is not clear why it is needed - after all, for most subscribers it was the first smartphone. We needed a shock device that would force the market to lower prices. And the first Login became such a device.

We do not have the task of making money by selling our devices, this is not our business. We just encourage other manufacturers not to be greedy and reduce prices for their products. Powerful players can afford it, other players are forced to look for other niches. But our task is to be on the client's side. We must make sure that all subscribers, with any income level, have the widest possible choice of available devices.

EM. Your end product is a communication service, telephones are not your product. You have taken on the mission to make devices more accessible and you are pushing the market down, the same Login is pushing the price segments down. And what happens after a while, how do you evaluate your actions?

We have a post-analysis of sales of all devices. For example, after the release of the first smartphone of the MegaFon Login line, we saw that the average cost of a smartphone with similar characteristics fell by almost 30 percent. This is very good, because it speeds up the process of replacing push-button phones with smartphones. If in 2012 - early 2013 the penetration rate of smartphones in our database was about 15%, now it is more than 40%.

If we look at the history of the MegaFon Login family of tablets, here we got results that exceeded our expectations: MegaFon Login 2 turned out to be so popular that it became one of the best-selling tablets in Russia. Last year, it was in first place in sales for three months in a row. As a result, as a result, manufacturers quickly and massively began to reduce prices for their tablets with similar characteristics, overall sales went up, this segment became massive.

Now the same story is being repeated with phablets. This is a new niche in the market - 2-in-1 devices that combine all the advantages of a smartphone and tablet. Due to the large screen size and its quality, such smartphones are optimal for using mobile Internet, watching videos, playing games, reading books, multimedia, social networks and many other tasks. On the other hand, they are compact enough to fit in a small purse or pocket without any problems. As a rule, such devices are flagships. Much less often you can find affordable phablets, there is something in the middle segment. Our task now is to make this product available to everyone.

EM. Speaking of Login+, are there many transitions from previous models? Is there such a statistic?

The bulk of buyers of phablets, as well as Login smartphones, are owners of "push-button" phones. At one time, we noticed that some customers would like to try smartphones, but they are stopped by a small screen - it is not always convenient to hit the keyboard on the screen or read books, watch videos. Login+ solves this problem.

But there are also customers who already use our smartphones and now buy a phablet. And there is a new trend in this: we see that there are customers who update smartphones or tablets, remaining within the Login line. It's about like with cars - there are always those who buy a new version of the same model every time. Why? Because everything suits.

In general, of course, devices from the MegaFon Login line most often become the first smartphones in life, the first tablets, and now also the first phablets. Many customers regard them as a great gift for parents and children. They are simple, affordable - a great option for "trying".

Marriage is present in all manufacturers without exception - from space rockets that put satellites into orbit, to disposable tableware. The current defect that we fix at home is less than the one that we fix by selling products of B-brands.

As I have already said, the quality of our devices is under special control and has the highest priority: after all, they are sold under the MegaFon brand and we bear image risks. For us, a high percentage of marriage would be an emergency. It is important for us that the devices work for a long time and with high quality, and the client could use the device in full for as long as possible. There is no task for a subscriber to buy a new, say, smartphone from us in a year. We do not aim to become a manufacturer and gain market share.

EM. If you look at how the Login line has evolved, you can see that from generation to generation, the amount of additional software in devices has decreased. In the first generation, there were three browsers (native, yours and from Yandex), several application stores. Today, the number of programs with duplicative functions has been drastically reduced. Now everything has become much clearer. Is this a conscious decision to make things easier?

Your question already has an answer. Yes, it's a conscious decision. For most buyers, the MegaFon Login smartphone is the first smartphone in their life, and the mobile Internet is a wild, uncontrollable beast. Therefore, we decided to simplify the task of entering this world as much as possible. We decided not to completely abandon presets, since many customers simply do not know how to use app stores. Today, our devices still have the main, most popular applications, as well as useful applications that can help in the operation of devices - antivirus, an application to improve performance, MegaFon's Personal Account, and so on.

EM. Now there is a discussion on the market that Yandex complains that it is supposedly not allowed to be installed on B-brand products, do I understand correctly that you yourself choose who to work with and what programs to install on your devices? Do you have any restrictions, do you have freedom of choice?

Absolute freedom. No one comes to us and does not indicate what to put. We are guided by what our subscribers want to see. All such decisions are made not “by eye”, but on the basis of figures that are formed from research.

The market is developing and we are with it. At first, we put many different applications on our devices, assuming that the more, the better. Now everything we bet is dictated only by the requirements of the market. And the requirements have changed: some customers want everything to be simple and clear. Another part of them are experienced users who are able to customize their new smartphone on their own.

EM. Let's get back to manufacturing in China. Today, many companies, including those with no experience in making devices, can go to factories and buy something, believing that they will be successful in this. Do factories single you out in some way, give you preferences? Due to volume, due to how you buy? You have a rigid approach to the price and they may not like it, it is more profitable to sell more expensive, but in smaller lots.

From their point of view, there are two key indicators - production and income. When an operator and some small player come to them, then, perhaps, in terms of a unit of goods, the income will be higher from a small customer. But in terms of the total volume, it is certainly more profitable to work with a large buyer. And most often it turns out to be the operator. In addition, the operator may still return with the order. Therefore, it is beneficial for the factory to give the best offer and receive guarantees of further cooperation, positive experience - after all, China lives off of such production, there is a lot of it. But there is one more point. Factories buy components, what any device consists of. The more components they buy, the more discounts they get. We had a case where a factory sold us a device for almost zero margin. They still benefited from it, as they increased production volumes. The next time they provided us with much better conditions compared to the competition. They went to another level, were able to show their partners that they are a serious player and got the maximum discounts.

It also plays into our hands that 90% of devices in Western markets are sold through operator retail, i.e. they are purchased by the operators themselves. These are major players and working with them is a certain level for factories. Therefore, historically, the attitude towards operators is much better than towards a nameless wholesaler.

EM. There is often an opinion that you can get a more competitive price for a phone or tablet from B-brands than create your own, because due to tests and other operations, the time to market is delayed. Other operators go this way with other people's products. Why don't you go like this?

In our own retail, there is a sufficient number of smartphones and tablets from B-brands. There are a lot of them today and that's good. We do not plan to release dozens of smartphones or tablets under our own brand. Let the assortment of salons be formed by other manufacturers. We care about the price on the shelf. To do this, we make one quality product, which, again, reduces prices on the market. From the position of the operator, keeping track of one product is much easier than following a dozen models with small circulations. Offhand today I see several promising niches where our devices could appear. Most likely, they will appear there very soon.

Afterword

I am sure that for many this text will seem strange. Well, how else! When manufacturers are fighting for market share, MegaFon plays a completely different game and wins time after time, selling its devices in hundreds of thousands of copies. The success story of the products of the Login family is amazing, because the operator approaches them with a completely different standard, does not seek to sell them a lot, and as a result sells huge circulations. I think that the secret of success that we have revealed in this material is simple to disgrace - they think about other things that appeal to consumers and make products attractive. While others compare specifications and prices against each other, MegaFon sets the minimum price for decent quality and pushes the market towards cheaper products. What makes the devices more accessible to a wide range of consumers, so that the services of any operator are in demand by a large number of people. This also has a business component, they are not dreamers at all. But you must admit that they do it well and beautifully.

Tet-a-tet. Sergey Sobolev, MegaFon - about how the operator creates their devices

Not so long ago, in the tête-à-tête section, we discussed MegaFon Retail, touched upon the issues of how devices are sold in the MegaFon network, what operator retail is looking at. The conversation turned out to be interesting and detailed, at the same time the idea came up to give an inside look at how the operator creates their devices and why, when all manufacturers play “football”, they kick the ball and win by offering other rules of the game, going beyond the market.

Therefore, I went to visit MegaFon, to Sergey Sobolev, he heads the direction of mobile terminals and is responsible for their development at MegaFon. Everything that comes out under the MegaFon brand is in its direct introduction. Let's take a look at this kitchen from the inside.

EM. Serezha hello, let's immediately take the bull by the horns. How do products under the MegaFon brand appear? Why are they the way they are and not others?

It all starts with studying the market and needs, as a result of which we find the most demanded niche in the field of devices.

When we see a need, we begin to prepare a technical description of a new device, taking into account the capabilities of manufacturers and customer requirements. Perhaps this is the most important and difficult stage, because the cost of a mistake is quite high, since we buy large batches of devices. If they are not in demand, the company will suffer losses.

The next step is to work with software developers, manufacturers of various components - from chipsets to cases, assemblers and many other suppliers and partners - companies located in various parts of the globe. We have a huge portfolio: more than 300 different partners. We always communicate directly with factories, since the quality of the device depends on how production and assembly are arranged. We exchange experience with operators in other countries to make sure that the selected partners are conscientious, that they have a history and it is 100% positive. After all, our main condition when working with factories is high quality requirements and strict production control, including random checks at all production stages.

After that, we make the final selection - we form a "short list" of suppliers. And at the next stage, we begin testing the work of prototypes on our network, after which we begin negotiations on the terms of the purchase. Our main goal at this stage is to get the lowest prices and best deals, while focusing on build quality and components. After all, getting a device at the output that will have good technical characteristics and the lowest cost is always a special challenge. Many do not believe that this is possible, but it is not. I will talk about this a little later.

And finally, the final step is preparing the product for launch on the market. Once again, we are carefully studying the competitive environment, finalizing retail prices, preparing packaging and instructions, which, by the way, we pay special attention to - after all, it is the main source of training in using the device. When we put our device on the counter, we must be sure that each customer will not have any problems getting the first experience with both the device itself and all its functions, as well as with mobile Internet.

Next - an advertising campaign and the start of sales. In short, the preparation process looks something like this.

EM. Then the question immediately arises why such a simple approach works for you, while other operators in Russia do not work out so well. Login played his game and changed the market, price segments on it. Operators are able to sell a device with zero margin, and if you look at the "big three" in Russia, then everyone is doing this, one way or another. But why only you became successful in this segment. What do you do that other operators don't?

Why other operators do it differently, I can't say. Perhaps they have different goals and objectives, this is a question for them. I will try to answer the way we see it.

I am sure that most operators have processes for preparing devices for launch, most likely, similar to ours. Only they buy dozens of devices, while we buy hundreds of thousands of them. Therefore, we can get the lowest prices - I'm sure all Mobile Review readers understand perfectly well what a volume discount is. There is an important difference - we should pay more attention to the processes of preparing the launch of devices on the market, because our risks are many times higher.

The line of smartphones and tablets MegaFon Login and three years ago, and today continues to turn the market. After the first smartphone, we released the first affordable tablets, which entered the TOP-3 of the best-selling devices of the past year. Now we have a new successful product - MegaFon Login+ phablet with a 5.5-inch IPS screen, good technical characteristics and a very good price offer in the current market conditions. This is the most balanced solution in terms of price / quality / reliability ratio. Every day I look at reviews of our devices and see that customers who bought a phablet feel they got more than they expected for its price.

EM. What is the situation on Login + now. There is a device in Moscow and the Moscow region, in some regions people complain that it is not on the shelves, they cannot find it and they say that it is a hoax.

We have about two thousand of our own salons and about the same number of partner salons throughout the country. From time to time there is a shortage here and there, despite the fact that we are trying to quickly replenish our inventory. But Login+ is indeed a very popular device. Despite the fact that they provided 100% of our retail, sometimes situations really arise when a hundred units of phablets were brought to the point of sale, most of them were already sold by lunchtime, and by the evening they were gone completely. I repeat, we are trying to provide the fastest possible logistics for all potentially scarce devices, but sometimes, unfortunately, you have to wait, especially in locations far from large cities. In this case, you can leave a request on the website or directly with the seller - and the client will be sure to be informed when the devices arrive from the warehouse to the point of sale.

EM. Hundreds of thousands of pieces, that's a lot for the market. When devices of the Login family appear, other players have to make the cost of their devices at the same level, or they are out of the market. With a difference in the purchase price, it becomes difficult and it turns out that your devices cost 1.5-2 thousand rubles cheaper. Huge difference, is this how you reformat the market? What happens to other players?

A large-scale launch of our products on the market results in price reductions by other manufacturers. And this leads to the fact that the number of available devices on the market is growing dramatically. This is our calculation.

Thus, when launching the first smartphone of the Login line in 2013, we noticed that the main reason for the low growth in smartphone penetration in Russia, despite the great interest of the audience in them, is their exorbitant price. Most smartphones, despite even simple configurations, were then worth a lot of money. And not every client was ready to pay a tidy sum for a device that, firstly, might not like it yet, and secondly, it is not clear why it is needed - after all, for most subscribers it was the first smartphone. We needed a shock device that would force the market to lower prices. And the first Login became such a device.

We do not have the task of making money by selling our devices, this is not our business. We just encourage other manufacturers not to be greedy and reduce prices for their products. Powerful players can afford it, other players are forced to look for other niches. But our task is to be on the client's side. We must make sure that all subscribers, with any income level, have the widest possible choice of available devices.

EM. Your end product is a communication service, telephones are not your product. You have taken on the mission to make devices more accessible and you are pushing the market down, the same Login is pushing the price segments down. And what happens after a while, how do you evaluate your actions?

We have a post-analysis of sales of all devices. For example, after the release of the first smartphone of the MegaFon Login line, we saw that the average cost of a smartphone with similar characteristics fell by almost 30 percent. This is very good, because it speeds up the process of replacing push-button phones with smartphones. If in 2012 - early 2013 the penetration rate of smartphones in our database was about 15%, now it is more than 40%.

If we look at the history of the MegaFon Login family of tablets, here we got results that exceeded our expectations: MegaFon Login 2 turned out to be so popular that it became one of the best-selling tablets in Russia. Last year, it was in first place in sales for three months in a row. As a result, as a result, manufacturers quickly and massively began to reduce prices for their tablets with similar characteristics, overall sales went up, this segment became massive.

Now the same story is being repeated with phablets. This is a new niche in the market - 2-in-1 devices that combine all the advantages of a smartphone and tablet. Due to the large screen size and its quality, such smartphones are optimal for using mobile Internet, watching videos, playing games, reading books, multimedia, social networks and many other tasks. On the other hand, they are compact enough to fit in a small purse or pocket without any problems. As a rule, such devices are flagships. Much less often you can find affordable phablets, there is something in the middle segment. Our task now is to make this product available to everyone.

EM. Speaking of Login+, are there many transitions from previous models? Is there such a statistic?

The bulk of buyers of phablets, as well as Login smartphones, are owners of "push-button" phones. At one time, we noticed that some customers would like to try smartphones, but they are stopped by a small screen - it is not always convenient to hit the keyboard on the screen or read books, watch videos. Login+ solves this problem.

But there are also customers who already use our smartphones and now buy a phablet. And there is a new trend in this: we see that there are customers who update smartphones or tablets, remaining within the Login line. It's about like with cars - there are always those who buy a new version of the same model every time. Why? Because everything suits.

In general, of course, devices from the MegaFon Login line most often become the first smartphones in life, the first tablets, and now also the first phablets. Many customers regard them as a great gift for parents and children. They are simple, affordable - a great option for "trying".

EM. For children, a good offer is an inexpensive phone that is not a pity to kill.

Honestly, we did not expect that children could become a large audience. We realized this only when, at the end of the school year (in 2013), we saw a sharp surge in sales - it was parents who bought smartphones for their children for good studies. Yes, it's great for kids. On the one hand, he really does not feel sorry for him - after all, children often lose or break something. On the other hand, it does not attract undue attention, it's not an iPhone, so you don't have to worry that it will be stolen or taken away. But still, design is very important for any audience, even in inexpensive smartphones. And we tried to make the devices of the MegaFon Login family uniform in terms of appearance and materials.

EM. That is, the devices look similar and this is done intentionally?

That's right. We developed the design based on feedback and our experience. In my opinion, the latest generation of Logins has the most a> balanced design among similar devices, both in terms of permanent use and in terms of aesthetics. Of course, you need to understand that you can’t please everyone, and besides, you have to remember about the cost of the device - a global change in production technology and form factors leads to a significant increase in cost. You always have to make a choice. But quality and reliability, in addition to a decent appearance, are the necessary attributes of modern budget devices.

EM. Can you elaborate on how you test your gadgets?

Each device we create goes through a whole set of tests, both at the factory and in our place: from software tests to physical “bullying”: phones are dropped from different heights tens of thousands of times, bent, heated and frozen in climate chambers. For example, one of the settings shows how quickly the screen or case is erased. This is a drum into which keys, change and other small items are placed, then it is spun throughout the day, almost like in a washing machine. If we find any significant defects, then work begins to eliminate them. In St. Petersburg, we have a laboratory that conducts similar tests for the acceptance of devices already on our side. There is also a software check of devices for the quality of their work in our network.

EM. But this does not guarantee that the devices will always work? No one is safe from marriage, and for sure people come to you and say - this and this do not work for me, replace my phone. How often does this happen, do you fit into the traditional 2 percent marriage?

Marriage is present in all manufacturers without exception - from space rockets that put satellites into orbit, to disposable tableware. The current defect that we fix at home is less than the one that we fix by selling products of B-brands.

As I have already said, the quality of our devices is under special control and has the highest priority: after all, they are sold under the MegaFon brand and we bear image risks. For us, a high percentage of marriage would be an emergency. It is important for us that the devices work for a long time and with high quality, and the client can use the device in full for as long as possible. There is no task for a subscriber to buy a new, say, smartphone from us in a year. We do not aim to become a manufacturer and gain market share.

EM. If you look at how the Login line has evolved, you can see that from generation to generation, the amount of additional software in devices has decreased. In the first generation, there were three browsers (native, yours and from Yandex), several application stores. Today, the number of programs with duplicative functions has been drastically reduced. Now everything has become much clearer. Is this a conscious decision to make things easier?

Your question already has an answer. Yes, it's a conscious decision. For most buyers, the MegaFon Login smartphone is the first smartphone in their life, and the mobile Internet is a wild, uncontrollable beast. Therefore, we decided to simplify the task of entering this world as much as possible. We decided not to completely abandon presets, since many customers simply do not know how to use app stores. Today, our devices still have the main, most popular applications, as well as useful applications that can help in the operation of devices - antivirus, an application to improve performance, MegaFon's Personal Account, and so on.

EM. Now there is a discussion on the market that Yandex complains that it is supposedly not allowed to be installed on B-brand products, do I understand correctly that you yourself choose who to work with and what programs to install on your devices? Do you have any restrictions, do you have freedom of choice?

Absolute freedom. No one comes to us and does not indicate what to put. We are guided by what our subscribers want to see. All such decisions are made not “by eye”, but on the basis of figures that are formed from research.

The market is developing and we are with it. At first, we put many different applications on our devices, assuming that the more, the better. Now everything we bet is dictated only by the requirements of the market. And the requirements have changed: some customers want everything to be simple and clear. Another part of them are experienced users who are able to customize their new smartphone on their own.

EM. Let's get back to manufacturing in China. Today, many companies, including those with no experience in making devices, can go to factories and buy something, believing that they will be successful in this. Do factories single you out in some way, give you preferences? Due to volume, due to how you buy? You have a rigid approach to the price and they may not like it, it is more profitable to sell more expensive, but in smaller lots.

From their point of view, there are two key indicators - production and income. When an operator and some small player come to them, then, perhaps, in terms of a unit of goods, the income will be higher from a small customer. But in terms of the total volume, it is certainly more profitable to work with a large buyer. And most often it turns out to be the operator. In addition, the operator may still return with the order. Therefore, it is beneficial for the factory to give the best offer and receive guarantees of further cooperation, positive experience - after all, China lives off of such production, there is a lot of it. But there is one more point. Factories buy components, what any device consists of. The more components they buy, the more discounts they get. We had a case where a factory sold us a device for almost zero margin. They still benefited from it, as they increased production volumes. The next time they provided us with much better conditions compared to the competition. They went to another level, were able to show their partners that they are a serious player and got the maximum discounts.

It also plays into our hands that 90% of devices in Western markets are sold through operator retail, i.e. they are purchased by the operators themselves. These are major players and working with them is a certain level for factories. Therefore, historically, the attitude towards operators is much better than towards a nameless wholesaler.

EM. There is often an opinion that you can get a more competitive price for a phone or tablet from B-brands than create your own, because due to tests and other operations, the time to market is delayed. Other operators go this way with other people's products. Why don't you go like this?

In our own retail, there is a sufficient number of smartphones and tablets from B-brands. There are a lot of them today and that's good. We do not plan to release dozens of smartphones or tablets under our own brand. Let the assortment of salons be formed by other manufacturers. We care about the price on the shelf. To do this, we make one quality product, which, again, reduces prices on the market. From the position of the operator, keeping track of one product is much easier than following a dozen models with small circulations. Offhand today I see several promising niches where our devices could appear. Most likely, they will appear there very soon.

Afterword

I am sure that for many this text will seem strange. Well, how else! When manufacturers are fighting for market share, MegaFon plays a completely different game and wins time after time, selling its devices in hundreds of thousands of copies. The success story of the products of the Login family is amazing, because the operator approaches them with a completely different standard, does not seek to sell them a lot, and as a result sells huge circulations. I think that the secret of success that we have revealed in this material is simple to disgrace - they think about other things that appeal to consumers and make products attractive. While others compare specifications and prices against each other, MegaFon sets the minimum price for decent quality and pushes the market towards cheaper products. What makes the devices more accessible to a wide range of consumers, so that the services of any operator are in demand by a large number of people. This also has a business component, they are not dreamers at all. But you must admit that they do it well and beautifully.

Tet-a-tet. Sergey Sobolev, MegaFon - about how the operator creates their devices

Not so long ago, in the tête-à-tête section, we discussed MegaFon Retail, touched upon the issues of how devices are sold in the MegaFon network, what operator retail is looking at. The conversation turned out to be interesting and detailed, at the same time the idea came up to give an inside look at how the operator creates their devices and why, when all manufacturers play “football”, they kick the ball and win by offering other rules of the game, going beyond the market.

That's why I went to visit MegaFon, to Sergey Sobolev, he heads the direction of mobile terminals and is responsible for their development at MegaFon. Everything that comes out under the MegaFon brand is in its direct introduction. Let's take a look at this kitchen from the inside.

EM. Serezha hello, let's immediately take the bull by the horns. How do products under the MegaFon brand appear? Why are they the way they are and not others?

It all starts with studying the market and needs, as a result of which we find the most demanded niche in the field of devices.

When we see a need, we begin to prepare a technical description of a new device, taking into account the capabilities of manufacturers and customer requirements. Perhaps this is the most important and difficult stage, because the cost of a mistake is quite high, since we buy large batches of devices. If they are not in demand, the company will suffer losses.

The next step is to work with software developers, manufacturers of various components - from chipsets to cases, assemblers and many other suppliers and partners - companies located in various parts of the globe. We have a huge portfolio: more than 300 different partners. We always communicate directly with factories, as the quality of the device depends on how production and assembly are arranged. We exchange experience with operators in other countries to make sure that the selected partners are conscientious, that they have a history and it is 100% positive. After all, our main condition when working with factories is high quality requirements and strict production control, including random checks at all production stages.

After that, we make the final selection - we form a "short list" of suppliers. And at the next stage, we begin testing the work of prototypes on our network, after which we proceed to negotiations on the terms of the purchase. Our main focus at this stage is to get the lowest prices and best deals, while focusing on build quality and components. After all, getting a device at the output that will have good technical characteristics and the lowest cost is always a special challenge. Many do not believe that this is possible, but it is not. I will talk about this a little later.

And finally, the final step is preparing the product for launch on the market. Once again, we are carefully studying the competitive environment, finalizing retail prices, preparing packaging and instructions, which, by the way, we pay special attention to - after all, it is the main source of training in using the device. When we put our device on the counter, we must be sure that each customer will not have any problems getting the first experience with both the device itself and all its functions, as well as with mobile Internet.

Next - an advertising campaign and the start of sales. In short, the preparation process looks something like this.

EM. Then the question immediately arises why such a simple approach works for you, while other operators in Russia do not work out so well. Login played his game and changed the market, price segments on it. Operators are able to sell a device with zero margin, and if you look at the "big three" in Russia, then everyone is doing this, one way or another. But why only you became successful in this segment. What do you do that other operators don't?

Why other operators do it differently, I can't say. Perhaps they have different goals and objectives, this is a question for them. I will try to answer the way we see it.

I am sure that most operators have processes for preparing devices for launch, most likely, similar to ours. Only they buy dozens of devices, while we buy hundreds of thousands of them. Therefore, we can get the lowest prices - I'm sure all Mobile Review readers understand perfectly well what a volume discount is. There is an important difference - we should pay more attention to the processes of preparing the launch of devices on the market, because our risks are many times higher.

The line of smartphones and tablets MegaFon Login and three years ago, and today continues to turn the market. After the first smartphone, we released the first affordable tablets, which entered the TOP-3 of the best-selling devices of the past year. Now we have a new successful product - MegaFon Login+ phablet with a 5.5-inch IPS screen, good technical characteristics and a very good price offer in the current market conditions. This is the most balanced solution in terms of price / quality / reliability ratio. Every day I look at reviews of our devices and see that customers who bought a phablet feel they got more than they expected for its price.

EM. What is the situation on Login + now. There is a device in Moscow and the Moscow region, in some regions people complain that it is not on the shelves, they cannot find it and they say that it is a hoax.

We have about two thousand of our own salons and about the same number of partner salons throughout the country. From time to time there is a shortage here and there, despite the fact that we are trying to quickly replenish our inventory. But Login+ is indeed a very popular device. Despite the fact that they provided 100% of our retail, sometimes situations really arise when a hundred units of phablets were brought to the point of sale, most of them were already sold by lunchtime, and by the evening they were gone completely. I repeat, we are trying to provide the fastest possible logistics for all potentially scarce devices, but sometimes, unfortunately, you have to wait, especially in locations far from large cities. In this case, you can leave a request on the website or directly with the seller - and the client will be sure to be informed when the devices arrive from the warehouse to the point of sale.

EM. Hundreds of thousands of pieces, that's a lot for the market. When devices of the Login family appear, other players have to make the cost of their devices at the same level, or they are out of the market. With a difference in the purchase price, it becomes difficult and it turns out that your devices cost 1.5-2 thousand rubles cheaper. Huge difference, is this how you reformat the market? What happens to other players?

A large-scale launch of our products on the market results in price reductions by other manufacturers. And this leads to the fact that the number of available devices on the market is growing dramatically. This is our calculation.

Thus, when launching the first smartphone of the Login line in 2013, we noticed that the main reason for the low growth in smartphone penetration in Russia, despite the great interest of the audience in them, is their exorbitant price. Most smartphones, despite even simple configurations, were then worth a lot of money. And not every client was ready to pay a tidy sum for a device that, firstly, might not like it yet, and secondly, it is not clear why it is needed - after all, for most subscribers it was the first smartphone. We needed a shock device that would force the market to lower prices. And the first Login became such a device.

We do not have the task of making money by selling our devices, this is not our business. We just encourage other manufacturers not to be greedy and reduce prices for their products. Powerful players can afford it, other players are forced to look for other niches. But our task is to be on the client's side. We must make sure that all subscribers, with any income level, have the widest possible choice of available devices.

EM. Your end product is a communication service, telephones are not your product. You have taken on the mission to make devices more accessible and you are pushing the market down, the same Login is pushing the price segments down. And what happens after a while, how do you evaluate your actions?

We have a post-analysis of sales of all devices. For example, after the release of the first smartphone of the MegaFon Login line, we saw that the average cost of a smartphone with similar characteristics fell by almost 30 percent. This is very good, because it speeds up the process of replacing push-button phones with smartphones. If in 2012 - early 2013 the penetration rate of smartphones in our database was about 15%, now it is more than 40%.

If we look at the history of the MegaFon Login family of tablets, here we got results that exceeded our expectations: MegaFon Login 2 turned out to be so popular that it became one of the best-selling tablets in Russia. Last year, it was in first place in sales for three months in a row. As a result, as a result, manufacturers quickly and massively began to reduce prices for their tablets with similar characteristics, overall sales went up, this segment became massive.

Now the same story is being repeated with phablets. This is a new niche in the market - 2-in-1 devices that combine all the advantages of a smartphone and tablet. Due to the large screen size and its quality, such smartphones are optimal for using mobile Internet, watching videos, playing games, reading books, multimedia, social networks and many other tasks. On the other hand, they are compact enough to fit in a small purse or pocket without any problems. As a rule, such devices are flagships. Much less often you can find affordable phablets, there is something in the middle segment. Our task now is to make this product available to everyone.

EM. Speaking of Login+, are there many transitions from previous models? Is there such a statistic?

The bulk of buyers of phablets, as well as Login smartphones, are owners of "push-button" phones. At one time, we noticed that some customers would like to try smartphones, but they are stopped by a small screen - it is not always convenient to hit the keyboard on the screen or read books, watch videos. Login+ solves this problem.

But there are also customers who already use our smartphones and now buy a phablet. And there is a new trend in this: we see that there are customers who update smartphones or tablets, remaining within the Login line. It's about like with cars - there are always those who buy a new version of the same model every time. Why? Because everything suits.

In general, of course, devices from the MegaFon Login line most often become the first smartphones in life, the first tablets, and now also the first phablets. Many customers regard them as a great gift for parents and children. They are simple, affordable - a great option for "trying".

EM. For children, a good offer is an inexpensive phone that is not a pity to kill.

Honestly, we did not expect that children could become a large audience. We realized this only when, at the end of the school year (in 2013), we saw a sharp surge in sales - it was parents who bought smartphones for their children for good studies. Yes, it's great for kids. On the one hand, he really does not feel sorry for him - after all, children often lose or break something. On the other hand, it does not attract undue attention, it's not an iPhone, so you don't have to worry that it will be stolen or taken away. But still, design is very important for any audience, even in inexpensive smartphones. And we tried to make the devices of the MegaFon Login family uniform in terms of appearance and materials.

EM. That is, the devices look similar and this is done intentionally?

That's right. We developed the design based on feedback and our experience. In my opinion, the latest generation of Logins has the most balanced design among these devices, both in terms of continuous use and in terms of aesthetics. Of course, you need to understand that you can’t please everyone, and besides, you have to remember about the cost of the device - a global change in production technology and form factors leads to a significant increase in cost. You always have to make a choice. But quality and reliability, in addition to a decent appearance, are the necessary attributes of modern budget devices.

Quite right. We developed the design based on feedback and our experience. In my opinion, the latest generation of Logins has the most https://cars45.com/listing/infiniti/ex/2010 https://cars45.com/listing/infiniti/ex/2010 weighted design among similar devices, both in terms of permanent use and aesthetics. Of course, you need to understand that you can’t please everyone, and besides, you have to remember about the cost of the device - a global change in production technology and form factors leads to a significant rise in price. You always have to make a choice. But quality and reliability, in addition to a decent appearance, are the necessary attributes of modern budget devices.

EM. Can you elaborate on how you test your gadgets?

Each device we create goes through a whole set of tests, both at the factory and in our place: from software tests to physical “bullying”: phones are dropped from different heights tens of thousands of times, bent, heated and frozen in climatic chambers. For example, one of the settings shows how quickly the screen or case is erased. This is a drum into which keys, change and other small items are placed, then it is spun throughout the day, almost like in a washing machine. If we find any significant defects, then work begins to eliminate them. In St. Petersburg, we have a laboratory that conducts similar tests for the acceptance of devices already on our side. There is also a software check of devices for the quality of their work in our network.

EM. But this does not guarantee that the devices will always work? No one is safe from marriage, and for sure people come to you and say - this and this do not work for me, replace my phone. How often does this happen, do you fit into the traditional 2 percent marriage?

Marriage is present in all manufacturers without exception - from space rockets that put satellites into orbit, to disposable tableware. The current defect that we fix at home is less than the one that we fix by selling products of B-brands.

As I have already said, the quality of our devices is under special control and has the highest priority: after all, they are sold under the MegaFon brand and we bear image risks. For us, a high percentage of marriage would be an emergency. It is important for us that the devices work for a long time and with high quality, and the client could use the device in full for as long as possible. There is no task for a subscriber to buy a new, say, smartphone from us in a year. We do not aim to become a manufacturer and gain market share.

EM. If you look at how the Login line has evolved, you can see that from generation to generation, the amount of additional software in devices has decreased. In the first generation, there were three browsers (native, yours and from Yandex), several application stores. Today, the number of programs with duplicative functions has been drastically reduced. Now everything has become much clearer. Is this a conscious decision to make things easier?

Your question already has an answer. Yes, it's a conscious decision. For most buyers, the MegaFon Login smartphone is the first smartphone in their life, and the mobile Internet is a wild, uncontrollable beast. Therefore, we decided to simplify the task of entering this world as much as possible. We decided not to completely abandon presets, since many customers simply do not know how to use app stores. Today, our devices still have the main, most popular applications, as well as useful applications that can help in the operation of devices - antivirus, an application to improve performance, MegaFon's Personal Account, and so on.

EM. Now there is a discussion on the market that Yandex complains that it is supposedly not allowed to be installed on B-brand products, do I understand correctly that you yourself choose who to work with and what programs to install on your devices? Do you have any restrictions, do you have freedom of choice?

Absolute freedom. No one comes to us and does not indicate what to put. We are guided by what our subscribers want to see. All such decisions are made not “by eye”, but on the basis of figures that are formed from research.

The market is developing and we are with it. At first, we put many different applications on our devices, assuming that the more, the better. Now everything we bet is dictated only by the requirements of the market. And the requirements have changed: some customers want everything to be simple and clear. Another part of them are experienced users who are able to customize their new smartphone on their own.

EM. Let's get back to manufacturing in China. Today, many companies, including those with no experience in making devices, can go to factories and buy something, believing that they will be successful in this. Do factories single you out in some way, give you preferences? Due to volume, due to how you buy? You have a rigid approach to the price and they may not like it, it is more profitable to sell more expensive, but in smaller lots.

From their point of view, there are two key indicators - production and income. When an operator and some small player come to them, then, perhaps, in terms of a unit of goods, the income will be higher from a small customer. But in terms of the total volume, it is certainly more profitable to work with a large buyer. And most often it turns out to be the operator. In addition, the operator may still return with the order. Therefore, it is beneficial for the factory to give the best offer and receive guarantees of further cooperation, positive experience - after all, China lives off of such production, there is a lot of it. But there is one more point. Factories buy components, what any device consists of. The more components they buy, the more discounts they get. We had a case where a factory sold us a device for almost zero margin. They still benefited from it, as they increased production volumes. The next time they provided us with much better conditions compared to the competition. They went to another level, were able to show their partners that they are a serious player and got the maximum discounts.

It also plays into our hands that 90% of devices in Western markets are sold through operator retail, i.e. they are purchased by the operators themselves. These are major players and working with them is a certain level for factories. Therefore, historically, the attitude towards operators is much better than towards a nameless wholesaler.

EM. There is often an opinion that you can get a more competitive price for a phone or tablet from B-brands than create your own, because due to tests and other operations, the time to market is delayed. Other operators go this way with other people's products. Why don't you go like this?

In our own retail, there is a sufficient number of smartphones and tablets from B-brands. There are a lot of them today and that's good. We do not plan to release dozens of smartphones or tablets under our own brand. Let the assortment of salons be formed by other manufacturers. We care about the price on the shelf. To do this, we make one quality product, which, again, reduces prices on the market. From the position of the operator, keeping track of one product is much easier than following a dozen models with small circulations. Offhand today I see several promising niches where our devices could appear. Most likely, they will appear there very soon.

Afterword

I am sure that for many this text will seem strange. Well, how else! When manufacturers are fighting for market share, MegaFon plays a completely different game and wins time after time, selling its devices in hundreds of thousands of copies. The success story of the products of the Login family is amazing, because the operator approaches them with a completely different standard, does not seek to sell them a lot, and as a result sells huge circulations. I think that the secret of success that we have revealed in this material is simple to disgrace - they think about other things that appeal to consumers and make products attractive. While others compare specifications and prices against each other, MegaFon sets the minimum price for decent quality and pushes the market towards cheaper products. What makes the devices more accessible to a wide range of consumers, so that the services of any operator are in demand by a large number of people. This also has a business component, they are not dreamers at all. But you must admit that they do it well and beautifully.