Apple’s Russia push slowed by pricey iPhones

By , Oct 25, 2013

Apple iPhone 5s 5c launch video (image 001)

Although Apple today launched the iPhone in an additional 35 global markets (with more to come next Friday), including Russia, its flagship iPhone 5s remains too expensive for all but the most wealthiest. The iPhone 5c, costing just $99 in subsidized markets such as the U.S., can cost nearly $800 in Russia, unsubsidized.

Apple’s goal of competing globally is being hampered by pricing centered on carrier subsidies. In countries such as Russia, India and elsewhere where subsidies are not allowed, the cost of an iPhone can equal a month’s salary – or more. As a result, Samsung’s cheaper Android phones control most smartphone sales…

“Six years after the iPhone’s introduction, Apple’s share of Russia’s smartphone market is hovering at about 8 percent as the device is too pricey for all but the wealthiest of the country’s 143 million people,” Bloomberg reports.

Although Apple’s share of the Russian smartphone market inched up to 8.3 percent from 7.9 percent, Samsung saw market share for its cheaper Android handsets rise to 54 percent, up from 40 percent.

Apple has taken some steps to make its devices more available in Russia, even recently attracting carriers back into the fold, the Cupertino, Calif. company needs to realize going global requires a new game plan.

“Half of the globe is non-operator markets,” IDC Moscow analyst Simon Baker told Bloomberg.

5s 5c banner

While a U.S. carrier can sell a subsidized iPhone 5c for $99 with a two-year contract, unsubsidized markets must offer the same handset for a much higher price. Over in the U.S., the online Apple Store sells the 16/32GB contract-free iPhone 5c for $549/$649. The pricing difference puts Apple at a disadvantage to lower-priced smartphones such as those from Samsung.

Baker said:

It’s really a matter of what Apple wants: to have a really global product and retain market share as the smartphone market moves toward cheaper price brackets, or to focus on making the maximum profit.

Wealthy Russians, who can afford either of Apple’s newest iPhones are opting for the more expensive iPhone 5s – by 10-to-1.

Next week, the new iPhones will be introduced in India, another emerging nation which has no carrier subsidies. Apple has used that country as a sort of test bed for its experimental pricing, offering everything from discounts to rebates and payment plans.

Are contract-free new iPhones priced out of reach in your country?

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  • Jeffrey Feuerstein

    925 dollars in russia, not ‘nearly 800′, 950 in Germany/Holland (my country)

  • mrloko

    And nearly $885 in india for 5s …sad..

  • Ted Forbes

    Apple will get there, its either sell, sell, sell or be sold.

  • Abinash Shaw

    This is one reason why I will stick with my iPhone 4 even if I have an irresistible urge to get a 5s! #pity
    Location: India

  • Singed

    Eastern Europe and south Asia seem to be affected by this the most. The iPhone will obviously never go widespread in these areas, but, truth to be told, it doesn’t have to. As long as there are mindless sheep in the States, who buy a new phone every year because it’s “trendy”, Apple won’t even need to look at these markets.

    • mav3rick

      It will not last much longer even there. Already destroyed user experience on the new neonOS; what used to be the eye candy look of iOS, now it’s just talked about idiotic clowny icons, blindly neon colours or perfect white screens. Plus what used to be only mentioned on Android, it was now introduced on iDevices: the Lag.
      Also it looks like repositioning on the marked: Yves St Laurent, Burberry, Pome. 1000$ for a phone is utterly outrageous.

    • Guest

      • Singed

        Here’s an upvote!

  • Mosz

    No matter how low the cost is with a contract, in the end it will add up to the same 800-900$..
    Over here i can get a iphone 5s for free, with a 35€/month 2-year contract, but personally i just buy one for 700€ without a contract.

    I still can’t believe how some folks don’ understand how it works.
    On another site US residents were complaining how costly the Nokia lumia was before they had a contract with carriers, they didin’t actually realize it was way cheaper then a iphone when you add up the costs of monthly payments… morons.

    • Singed

      It might be the same price without a contract, or atleast similiar one, but keep in mind that an average American earns two or three times more money a month than an average Indian or Russian.

      That’s why it’s only bought by the richest of the country.

  • http://boyangeorgiev.tumblr.com/ Boyan Georgiev

    Mtel, the biggest carrier in Bulgaria, Europe offers the 5s for $940. A price which is out of reach for the majority of Bulgarians.