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All three Russian leaders dump iPhone

VimpelCom follows MTS and MegaFon in ending sales of the Apple flagship, turning its attentions to Samsung


Published: 16 July, 2013

READ MORE: Russia | VimpelCom | iPhone

All three major Russian cellcos have stopped selling the iPhone, the most dramatic instance so far in a rising tide of operator backlash against Apple's tough contractual requirements. VimpelCom has severed its ties with the handset provider, following in the footsteps of MTS and MegaFon. VimpelCom says it has put Samsung at the top of its list of smartphones to promote under its BeeLine brand.

According to PhoneArena, VimpelCom blamed "draconian contracts" and "harsh conditions... especially in the marketing department" for its decision to dump the iPhone and sign a new deal with Samsung.

The iPhone is still available in Russia via Apple's own online stores, which it has been expanding recently in the face of carrier hostility, and from some local operators, and non-cellco affiliated stores. However, the big three are by far the biggest channel to market for smartphones. Russia has over 180m mobile subscribers and the three main operators control 80% of them.

This is a country which Apple has never found easy - notably, Russia bans handset subsidies, making the iPhone an expensive option for most customers. With the nation's high import taxes, one of the handsets can cost as much as US$920. On the black market, iPhone 5s have even been reported reaching over $3.500.

MTS stopped selling the iPhone at the end of 2012 and is majoring on Windows Phone devices, which has helped enable the Microsoft OS to overtake iOS, gaining 8.3% of smartphone sales compared to 8.2% for Apple (the latter figure down from 9%). "Apple wants operators to pay them huge money, subsidizing iPhones and their promotion in Russia. Now it's not beneficial for us. It's good we stopped selling the iPhone as these sales would've brought us a negative margin," MTS CEO Andrei Dubovskov told Bloomberg at the time.

More broadly, operator resentment of Apple's famously demanding contracts and high handed approach has been mounting for some time, to the extent that some major players, notably China Mobile, have refused to sell the iPhone. And if the iPhone continues to lose its magic, and cellcos can make a similar impact with other devices with lower subsidy and marketing costs, Apple will see more partners melting away.

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