) has a long record of troubles in the Russian market and the list
has just grown longer.
Apple's largest partner in Russia -- handset retail superpower
Svyaznoy -- found itself under antitrust scrutiny after its
competitor, another tech retail giant, Euroset, filed a complaint
with the country's Federal Antimonopoly Service (
Since the last of Russia's major carriers
dropped their wholesale contracts with Apple
in July (over subsidies and marketing costs), the company has had
to rely on Svyaznoy almost exclusively to sell iPhones in Russia.
Its share of iPhone sales could grow to almost 70% by September,
. The FAS has the right to order companies to break a contract if
the agency concludes that a company leads to the control of more
than 20% of a market.
While major carriers and other powerful Russian players such as
Euroset would have embraced the opportunity to sell Apple products,
the companies have been deterred by Apple's unwillingness to
negotiate mutually acceptable terms.
Apple CEO Tim Cook reached out to potential Russian partners
himself, reinstating the same offer, but was rejected "in an
extremely unpleasant manner," Eldar Murtazin, the leading analyst
of Mobile Research Group, noted in a
Earlier this summer, in a
conference call with analysts
, Tim Cook said that the iPhone activations in Russia set a record
last quarter and that the company was "really happy" with how it
was doing there. The market share of iOS devices is surprisingly
small in Russia, according to an
. With a 8.3% market share in the second quarter, it trails not
) Android (73.3%), but also
) Windows Phone (8.6%).
Cook downplayed the loss of carrier partnerships, but confirmed
that Apple is seeking a workaround for the situation.
"We're continually looking for other relationships to both add and
enhance the ones we have got," said Cook to analysts. Some Russian
that Apple has chosen Merlion and diHouse as its Russian
distributor, but the companies
have not yet confirmed this as fact
With a population of 143 million, Russia remains an important
global market for handset makers, and it is the
biggest online market in Europe
. Some 9.7 million smartphones were sold there last quarter,
according to the IDC
The market's growth potential looks promising: Smartphone sales
account for 40% of total mobile phone sales in Russia, compared to
the global average of 55%, a report by
J'son & Partners Consulting
However, there are a sizeable number of iPhones that get into the
country illegally, only to be subsequently sold through alternative
retail channels. In 2012, Russia's "gray market" was
to account for almost 20% of the total mobile phone sales. Some
experts argue that the current crisis affecting official shipments
might significantly extend the gray market.
For Apple, revamping the official distribution network in Russia no
later than December, when iPhone 5C and 5S should hit the local
market, could be crucial.
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