A $133 million project with an uncertain future

It was recently one year since the Russian invasion of Ukraine. Since then, different Western countries (with the United States at the helm) have implemented certain blockades, I feel the technological one that directly affects the civilian population, but also companies.

To get out of trouble, Russia is going to invest an “unprecedented” amount of resources to develop its own industry and achieve the long-awaited technological independence. They have started with processors and the next step is to attack the smartphone segment. Now, there will be several stones on that path.

A global technological blockade

In Wired we can read that Russia is investing to create a national industry with which to create mobile phones and other electronic devices. Before we get into that topic, let’s see why, since some context is necessary.

One of the ways in which the West can exert pressure to end the armed conflict in Ukraine is to leave Russia out of the technological competition. Apple and Samsung were among the first to withdraw from the country and civilians cannot buy the new models – at least officially. In fact, from the West, the export of telephones and other electronic devices that cost more than 300 dollars was prohibited, but this goes far beyond the final market.

And it is that, the Western alliance has prevented companies that use North American technology from having Russian companies in the client portfolio. Intel, Qualcomm, AMD or Nvidia are some of them, but here we are no longer talking only about “companies”, but also about “technologies”.

That is why TSMC – a Taiwanese company – and other semiconductor manufacturers are prohibited from developing or selling chips to Russia that contain any hint of US-origin technologies. This means that the most powerful chips of recent years (and not so powerful ones) go to devices made in Russia.

Russia could buy components from TSMC, which is the company we are using as an example, but with outdated technology. To give you an idea, the Taiwan government has set a limit: any chip that works at 25 Hz, has a performance of more than 5 GFLOPS or a transfer speed of 2.5 MB/s or higher, are prohibited. This Android calculator is more powerful, much more.

As a consequence of the sanctions, the Russian telecommunications market contracted by 39% in just a few months. Russia’s response? Create your own mobile phone.

Russian mobiles with a 10% share of the local market in 2026

NCC -National Computer Corporation- is one of the most important Russian technology companies and the one with the plan to sell 100,000 mobile phones and tablets before the end of 2023. They have not yet gotten around to it, so it is an extremely ambitious goal, but goes further.

Alexander Kalinin, founder of NCC, has declared that they are going to invest almost 133 million dollars in developing this project with the aim of achieving 10% of the local market by 2026.


The AYYA T1 has a button to activate a “safe mode”.

These are numbers so large that to Karen Kazaryan, CEO of the Internet Research Institute, they are more of a public relations stunt than a tangible project. But hey, in the end, Russia has promised unprecedented amounts of funding to develop its industry, and that includes both hardware and software.

In this sense, when Instagram, TikTok, FaceBook or Twitter were blocked in the country, companies and national social networks gained users, such as VKontakte -the Russian FaceBook-, Rossgram -Instagram- or RuTube -YouTube-. They have also had to replace the Play Store and the App Store and the replacement is RuStore, with more than 10 million users according to its owners.


The screen of the AYYA T1 is… that of an input range.

Now, one thing is software and another is hardware. The latter is something more complete than “updating”. In fact, Russia already tried last year to have its own mobile phone. It was the AYYA T1, a smartphone of which only 400 units were sold during the first quarter of 2022 and with which they had problems with regard to the AYYA T2.

TSMC was not supplying chips -because of the restrictions we mentioned before- and the project was halted.

Hope in software, not so much in hardware

From NCC they comment that the objective is to make agreements to boost the local industry thanks to the new injection of the Government, but they can also make deals with Chinese companies.

The price target that has been set for these Russian mobiles is between 10,000 and 30,000 rubles -between 115 and 375 euros to change-, but from agencies such as Counterpoint they believe that they do not believe there is a gap in the market -where brands like Xiaomi , Realme or Honor continue to compete – so that users bet on the national mobile.

These three companies have known how to take the gap left by Samsung and Apple and it does not seem feasible for users to abandon brands they know and trust, so that technological independence is complicated.

In software, things are different because there are alternatives based on Western applications and civilians have been dealing for months without apps like Google Maps or Gmail, but Russia will have to deal with the cheap phones that are already available in China.

As Kazaryan points out, “why would someone buy a Russian phone that is more expensive than a Xiaomi?” We will see what happens, but it is clear that Russia is going to push the national technology industry after realizing how much it depends – like almost everyone, really – on technologies that do not belong to it.


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