updated 12:00 am EST, Sat March 8, 2014
Agreement with Apple requires $28 million in marketing as well
After not carrying the iPhone for nearly four years because of a dispute about sales guarantees, Russia's second-largest carrier Megafon signed a new deal with Apple late last year to return to selling the popular smartphone. The new deal requires the carrier to buy at least 750,000 iPhones over the course of three years, and spend at least $28 million in marketing the smartphone. While not a high number compared to the US, the figure was called "reasonable" by Russian financial analysts.
The terms of the agreement were revealed in Megafon's 2013 financial statements, reports AppleInsider, quoting a Russian analyst as saying that while the minimum amounts were "reasonable," he doubted that the carrier "could sell much more than this [volume]." Apple doubled iPhone sales in Russia during 2013, but this still represented just 1.57 million units from all carriers over the course of the year.
Third-place Vimpelcom and first-place MTS have also renewed deals with Apple to carry the iPhone, following a change in the law that previously forbid carriers from subsidizing smartphones in the manner commonly used in the US and other countries. About half of Russian iPhones are still sold through electronics dealers rather than carriers, and the top iPhones continue to be prohibitively expensive in Russia (starting at around $918 for the smallest-capacity iPhone 5s). As a result, Apple continues to offer the iPhone 4 along with the iPhone 4S as entry-level models (the iPhone 4 units are probably US refurbs, but the company has been rumored to still be making new iPhone 4 models for developing markets like Russia and India).
Presently, Apple holds about nine percent share of the Russian smartphone market -- but characteristically, also makes about 20 percent of the $9 billion in annual revenues there. The agreements lock in Russia's top three carriers to promote and carry the iPhone through 2016, meaning they will get at least the next two premium models Apple produces, along with any additional iPhone models that may come out. Apple is thought by speculators to be testing two future models with larger screens, which would presumably debut this fall.