Russian efforts to upgrade their Cold War era military equipment have fallen short because the country cannot afford all the new tech that has to be developed or to buy enough of the new gear to replace all the older stuff. Naturally the only way this all works out is via compromises. So the new infantry rifle, the AK-12, despite all its impressive new features, will be restricted to the elite (commandos and paratrooper) forces. Meanwhile the Cold War era AK-74, which uses the same ammo as the AK-12, has been upgraded again. The last upgrade, to the AK-74M in 1991, was actually quite minor. The new upgrade does even less to the rifle itself but recognizes that the major change for infantry rifles in the last two decades has been accessories. These include laser pointers, infrared aiming lights, red dot reflex sight and new items every year. Some Russian troops, especially elite ones, have been getting these accessories and confirming that this stuff is worth it in combat. Most Russian infantry know (via the Internet) that this life-saving new gear is out there and have made it clear that getting it would do wonders for reenlistment rates and troop morale. So the latest upgrade for the AK-74 amounts to giving the troops what they want and need in terms of assault rifle accessories. The Russians claim that with accessories the AK-74M is 50 percent more accurate at distances up to 300 meters (the most common distances encountered in combat.)
Meanwhile there is the new AK-12, which will eventually replace the AK-74. Back in 2012 the two century old Russian firm (Izhmash) that has produced assault rifles since World War II, announced the arrival of the fifth generation AK-47. This was the AK-12 it used a lot of the basic AK-47 design principles but added many new features popular in Western assault rifles. Appearing for the first time towards the end of World War II, assault rifles have since become the standard infantry weapon, almost entirely replacing the bolt-action and semi-automatic rifles that had ruled the battlefield for nearly a century. The first generation AK-47 entered service in the late 1940s, followed by the upgraded (but seemingly identical to the casual user) AKM in the 1960s. In the 1970s there was a major change, the AK-74 which was very similar to the U.S. M-16 in the 1970s in that it used a smaller, higher velocity bullet. After that came another substantial redesign. This was the AN-94, a much improved AK-74 ready for service in the 1990s.
The AK-12 is a 3.3 kg (7.3 pound) weapon that is 943mm (37.1 inches) long with a 415mm (16.3 inch) barrel. It can be fitted to fire one of four calibers, the original 7.62x39mm of the AK-47/AKM, the 5.56x45mm of the M-16, the 5.45x39mm of the AK-74/94/12, or the 7.62x51mm NATO rifle/machine-gun round. The AK-12 can use all AK-47/AKM magazines when firing 7.62x39mm ammo.
There are a lot of small but important changes in the AK-12. The stock is adjustable. The charging handle is easily used whether you are left or right handed. There is an improved safety switch, pistol grip, hinged top cover, muzzle break, iron sight, and (smaller) ejection port. The AK-12 has picatinny rails (the U.S. developed standard for attaching all sorts of accessories). The fire control switch now allows for single shot, full automatic, and three round bursts. The AK-12 is inherently more accurate because of improved barrel rifling. The AK-12 handles more easily, has longer effective range (up to 600 meters), and apparently has the same ruggedness of the original AK-47. That last item is being put to the test as more and more AK-12s are used in combat zones where their performance under combat conditions can be measured.
The AK-12 is the second attempt since the end of the Cold War (in 1991) to develop a worthy successor to the AK-47. Earlier efforts had not been entirely successful. Part of the problem was that there was not a pressing need for a new AK in Russia. For example, in 2011 Russia stopped buying new AK-74 rifles. Since they already had ten million AK assault rifles (most of them older AK-47 and AKM models) in stock and less than a million troops on active duty (and about as many in reserve units). Buying more assault rifles was deemed wasteful. This did not stop the purchase of special small arms for commandos and other specialist combat units.
While the AK-74 entered service in the 1970s, twenty years later a replacement was developed, the AN-94. This rifle used the 5.45mm round first seen in the AK-74 but was able to use larger (45-round and 60-round) magazines. The AN-94 also had burst fire (of two rounds, while Western rifles tend to use three rounds). The AN-94 was supposed to replace all AK-74s in Russian service but due to the dissolution of the Soviet Union in 1991, and sharp cuts in the defense budget, this did not happen. There were also concerns about the mechanical complexity and reliability of the AN-94. That's apparently why the AK-12 was not based on the AN-94, aside from the AN-94 ability to handle a 60 round magazine.
Meanwhile, an improved AK-74 was introduced in 1991 and is still in service as the AK-74M. This is a 3.4 kg (7.5 pound), 94.3 cm (37.1 inch) weapon with a 41.5 cm (16.3 inch) barrel. It has rails for sights and such and can use a 30 or 45 round magazine. Rate of fire is 650 RPM on full auto, and max effective range was 600 meters. Some five million AK-74s were built, most of them before the Cold War ended in 1991. North Korea manufactures a copy of the AK-74 called the Type 98. Over fifty million AK-47s and AKMs were made, most of them outside Russia. Production, on a small scale, continues.
Meanwhile, several additional AK-74 variants have been developed and put on the market. The AK-101 fires the 5.56mm NATO round and has a 30-round clip. The AK-103 fires the 7.62x39mm round used in the original AK-47, for those who have concerns about the ability of the 5.45mm round to stop enemy troops. The AK-102, 104, and 105 are compact rifles designed for the export market and are available in 5.56mm NATO, 7.62x39mm, and 5.45x39mm calibers. All have 30-round clips.
The company that manufactures the AK-74 still has export sales, which actually kept the firm in business for the last two decades. Orders from the Russian military declined steeply with the end of the Cold War and dissolution of the Soviet Union in 1991, and export sales were pursued aggressively. It was a matter of economic survival for Izhmash, which has been manufacturing weapons since 1807. Izhmash has also tried to shut down all the unlicensed manufacturers of AK-47/74 weapons. This has not been very successful as during the communist period things like patents and trademarks were regarded as capitalist degeneracy.