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.
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