iPhone stumbles in Russia

Paul Rasmussen — Wed, 25 Mar 2009 14:23:40 -0400

Russian consumers have failed completely to grasp why they should pay an exorbitant fee for the pleasure of using Apple's iPhone handset, albeit that it has achieved iconic status is Western Europe and the US. Sales of the iPhone by Russia's three largest mobile operators have been weak with only 230,000 being purchased in Q4/08, and sales have fallen by 30 to 40 per cent since the start of 2009, not helped by the Russian currency losing 30 per cent of its value.

The three iPhone operators are reported to be urgently requesting a renegotiation of their non-exclusive deals to carry the 3G iPhone, which went on sale last autumn. MTS had signed to sell one million iPhones by October 2011, while Megafon and VimpelCom agreed with Apple to sell 1.5 million between them. The three operators now want to cut their unit sales obligations and the price they pay for the iPhone. Analysts claim about half of the iPhones imported into Russia last October remain unsold.

The price of the iPhone in Russia today is between US$400 and US$800 which is seen as beyond the reach of all but a very small minority. However, the situation has been clouded by consumers obtaining iPhone on the grey market for a substantially lower price, with the latest estimate that 500,000 iPhone are in use in Russia at present.

Sales of the Apple handset are also said to be very slow in India where price sensitivity and a consumer desire for prepay, as against the iPhone contract model, is prevalent.

It remains unclear if the situation in Russia and India could improve if, as heavily rumoured, Apple will launch four models of its iPhone handset. The devices are speculated to have HSPA capability together with video capture--which doesn't sound like a move towards a low-cost device.

For more on this story:
Rethink-Wireless and The Register

Russian operators sign iPhone agreements, despite illegal imports

Paul Rasmussen — Wed, 03 Sep 2008 12:52:47 -0400

Megafon has become the second Russian mobile operator to sign a distribution agreement for Apple's 3G iPhone handset. Vimpelcom, the No. 2 operator in Russia, signed up to the iPhone last month, but only after 'persuading' Apple to drop its onerous 10 percent revenue share business model.

However, Russia is already one of the iPhone's biggest markets because of illegal imports. A telecoms analyst at UniCredit Aton estimated there already are more than 500,000 iPhones in the country with monthly "grey" imports running in excess of 20,000.

The device has become something of a cult item among the political elite with handsets changing hands for above US$1,000 -- a US$600 premium over the suggested retail price.

MTS, the country's largest operator, is also rumoured to be negotiating a deal for the iPhone, meaning yet another of Apple's "mandatory" contract clauses of carrier exclusivity has pretty much gone out the window.

For more on this story:
- go to Moscow Times and MocoNews

Related articles:
MTS to purchase largest Russian cell phone retailer. MTS story
Russia's MegaFon mulls €3B Iranian venture. Megafon story

Illegal Imports

iPhone stumbles in Russia

Russian operators sign iPhone agreements, despite illegal imports