Why Russian carriers are ditching the iPhone

Why Russian carriers are ditching the iPhone

As of this month, the iPhone is no longer available on any Russian carrier. You can still get iPhones in Russian, of course, both at independent retail chains and, now, directly from Apple. They're just off the Russian carriers, and Phillip Elmer-DeWitt thinks he knows why. From Fortune:

But what is almost certainly true is that the lack of subsidized pricing and the high import duties and taxes can give an aggressive competitor trying to grow its market share plenty of room to undercut Apple -- and not just in terms of their percentage of the take. Contracts can contain all kinds of sweeteners and the opposite of sweeteners, like the commitment Apple has been known to put into its contracts that require a carrier to buy a larger number of iPhones than that carrier might think it can sell.

The iPhone isn't just a premium product, it's a premium Apple product and Apple cares very deeply about not just the sales of their phones, but the perception of their brand. For carriers, Apple is likely a huge pain in the ass. And not just their no-crapware, no-logos policy, but how you can and can't advertise, or can and can't run sales. In a place with no subsidies, and with far more acquiescent options, it's easy to see carriers pivoting away from Apple and towards those options.

Maybe the less expensive iPhone will be a better match for Russian carriers, or maybe Apple's direct channels, and independent retailers, are just a better fit for Apple in the Russian market.

Any Russian readers have a take?

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Rene Ritchie

EiC of iMore, EP of Mobile Nations, Apple analyst, co-host of Debug, Iterate, Vector, Review, and MacBreak Weekly podcasts. Cook, grappler, photon wrangler. Follow him on Twitter and Google+.

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Reader comments

Why Russian carriers are ditching the iPhone


Apple expects the carriers to bend over backwards to their demands thinking that everyone is running out to get an iPhone which isn't the case in many parts of the world. Works well for them in many places but won't be the case here.

I don't think this has anything to do with requiring for a carrier to buy a larger number of iPhones than that carrier might think it can sell.

I hope Apple won't bend and go the Android way because of this. Brand perception should be a priority. No crap-ware, no carrier logos. No inappropriate advertising. Apple should stand is ground. Even if some carriers ditch the iPhone.

I thought this was the crux of the matter:
"Mobile phone licensing in Russia is controlled by a federal agency called Roskomnadzor, and Roskomnadzor does not permit the kind of subsidy programs that allow U.S. buyers to purchase an iPhone 5 for $199 or an iPhone 4 for $0."
When two different cultures clash, the customer might suffer. Time will tell.

Not from Russia... but living in a country where the new Android and Windows Phone launch at the same prices as the latest iPhone, only going down with time, and people purchasing the alternatives over the iPhone, I think that speaks highly about the variety of options and the premium hardware out there. Yes, iPhone may be a premium Apple product, but it certainly is no longer "the" premium phone out there. With the likes of Nokia Lumia 925, HTC One, and Samsung Galaxy S4 among others high in demand in a country such as Pakistan even, I think Apple will eventually have to adjust their strategy a bit or they may be in trouble of falling behind in other countries as well.

Hopefully with the release of iOS7 and a new iPhone model later this year, they'll be able to claw their way back to the top... but that's just something that remains to be seen.

This piece in Salon today seems relevant:


In a nutshell, he likes the stock Google Android phones he has been using as daily drivers of late, but the carrier-subsidised ones drive him nuts. With the stock Google ones being $649 and the carrier ones $149, the majority of users see the carrier-modified versions.

Apple is not perfect, but their (mostly successful) insistence on carrier non-interference has been one of the best parts of the iPhone.

Isn't it just that carriers are no longer worried about not having the iPhone. Having done the sums I think the billions in upfront commitment against the actual profit they can make is not worth the gamble. Especially as the iPhone is no longer perceived as the phone to have. I went gaga and bought into the 3Gs as the best there was. Now I'm on an Galaxy S2 with the rest of my family still on iPhones. Contract ends soon and there's nothing from Apple to make me crave to go back. Will there ever be?