Apple is being frozen out of the Russian mobile phone market.
In Russia, three big carriers provide service for 80% of the country’s 180 million mobile subscribers. None of those carriers support the iPhone anymore, notes Philip Elmer-DeWitt at Fortune.
Previously, two of the carriers — OAO Mobile TeleSystems and Vimplecom — sold the iPhone. They’ve decided to drop the iPhone.
Andrei Dubovskov, CEO of OAO, explained the rationale behind dropping the iPhone to Bloomberg by saying, “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.”
He’s going to put his weight behind Windows Phone, which actually has the same amount of market share in Russia as Apple, ~8% for each.
Vimplecom will push Samsung Galaxy S4s as an alternative to the iPhone.
In Russia, the iPhone is very expensive. It sells for $918 there because carriers don’t subsidise the price, and Russia has high taxes on imports like the iPhone.
Despite losing support from the main carriers in the country, Russians will still be able to buy iPhones at electronics stores and on the grey market.
But, for Apple this is not good.
The iPhone’s growth rate is slowing considerably, which has hammered its stock price.
Being shut out of Russia isn’t going to help it get the iPhone business cranking again.
Perhaps when (if?) it releases a low-cost iPhone, Apple will have a new attack in the Russian market, and these carriers will start supporting the iPhone again.
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.