Apple’s Russia push slowed by pricey iPhones

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?