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All three major Russian carriers no longer selling iPhones

updated 03:05 pm EDT, Wed July 17, 2013

Russian buyers forced to turn to other sources

All three major Russian phone carriers have stopped selling the iPhone at their stores, leaving people to buy from Apple directly, Svyaznoy outlets, or else the black/gray market, says Fortune. The last holdout was VimpleCom, whose Beeline brand severed its ties with Apple last week, replacing the iPhone 5 in its lineup with the Samsung Galaxy S4. Beeline blames the switch on "draconian [Apple] contracts" and "harsh conditions...especially in the marketing department." Previously, MTS CEO Andrei Dubovskov stated that "Apple wants operators to pay them huge money subsidizing iPhones and their promotion in Russia" when asked about his own company dropping the hardware.

Other factors may also be at play. Russia's Roskomnadzor agency doesn't allow phone subsidies, which typically drop the customer costs for devices, but with the tradeoff of locking people into multi-year contracts. Russian import duties and taxes are also extremely high, such that an unlocked iPhone 5 costs the equivalent of $918 in the country versus the $649 it is in the US. Apple has blamed $140 of that on Russia's VAT, and $129 on combined exchange, import, and channel expenses.

The situation is said to be giving an advantage not just to Android devices, but also Microsoft's Windows Phone. Last quarter Windows grew to 8.2 percent of the Russian smartphone market, up from 5.1 percent during Q2 2012. In the same time span, Apple slipped from 9 percent to 8.3.



By Electronista Staff
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Comments

  1. chas_m

    MacNN Staff

    Joined: 08-04-01

    Personally I think this is at best a minor problem for Apple. The iPhone in Russia isn't going to sell to the masses (at least not until a "low cost" version comes out), but to mostly the wealthy, who live mostly in cities, and can order online or buy directly an iPhone from Apple's own stores. Yes this will probably help Samsung a little, but given the requirements of the carriers there you have to wonder how much.

  1. RockoBoffo

    Fresh-Faced Recruit

    Joined: 06-12-13

    Chas, when you say "at best" do you really mean "at most"?

    Your point makes no sense at all, I hope you realize that. Yes they sell the iPhone 5 to people who can afford the iPhone 5. That's true in every country of the world, only people that can buy it, do buy it.

    That's neither here nor there, it's not a real point. The iPhone 5 is a product. They managed to get 9% marketshare with the iPhone 5, the cost of it, taxes, import duties and all.

    The lower cost iPhone will address another market - but iPhone 5 or low cost iPhone will sell better if the carriers would carry the phone.

    Being dropped from all the carriers isn't an issue? I'm not exaggerating the importance of Russia versus the rest of the world by any means, but if you lose all the carriers in a country, you might want to consider that at least a localized issue for that problem.

    I can understand being an Apple chearleader - but why the complete nonsense post?

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