Apple iPhone Dropped By Russia’s Major Wireless Carriers

The Apple iPhone is no longer being carried by any of Russia’s three major wireless carriers.

While Russian cell phone users can still purchase the iPhone, they must do so at black/gray marketing pricing from Apple direct, at Svyaznoy outlets, and through various other third-party sellers.

According to Fortune, the last holdout was VimpleCom, whose Beeline brand cut off ties with Apple last week. The company quickly replaced the Apple iPhone 5 with the newer Samsung Galaxy S4.

In speaking of its decision to ditch the Apple iPhone line, Beeline claims the company used “draconian [Apple] contracts” and “harsh conditions… especially in the marketing department.”

MTS CEO Andrei Dubovskov had previously stated that “Apple wants operators to pay them huge money subsidizing iPhones and their promotion in Russia.”

Russia’s Roskomnadzor agency doesn’t allow phone subsidies, and Apple relies on carriers to sell its smartphones at a loss alongside two-year cellular contracts.

Purchasing an iPhone 5 in Russia now costs $918 compared to an unlocked or off-contract version in the United States, which averages $649.

Apple believes the Russian government is knocking its devices out of the market by charging a $140 VAT and an additional $129 that covers exchange, import, and channel expenses.

With Apple struggling to keep a footing in Russia, the move could help drastically increase Samsung smartphone sales alongside other Google Android based devices. Microsoft could also capitalize further with increasing sales for its Windows Phone lineup.

Microsoft in the last quarter was the countries big winner with an increase from 5.1 percent of the market to a more respectable 8.2 percent. Apple from the same period slipped from 9 percent to 8.3 percent of the Russian smartphone market.

Do you think the inability to subsidize its phones and the loss of major wireless carrier support will ultimately hurt Apple’s ability to grow its lineup in Russia?