Russian carrier blames ‘Apple ‘dictatorship’ for $1,000 iPhone price

“OAO Mobile TeleSystems, the iPhone’s biggest wireless carrier in Russia, criticized Apple Inc. for not cutting the device’s $1,000-plus price in the country and being too strict about how it’s sold,” Sarah Frier reports for Bloomberg. “The phone’s cost makes it a hard sell in a market where rival models go for as little as $120, executives from the Moscow-based company said at an event yesterday in New York. Apple also requires that the carrier’s retail locations meet its standards, imposing additional burdens, MTS said. ‘They’re more in a dictatorship mode where they say, ‘This is what you have to do or you don’t get the iPhone,’’ Vasyl Latsanych, the Russian company’s vice president of marketing, said at the event. ‘Being arrogant with your partners in big markets doesn’t pay off.'”

“The remarks exposed a rift for Apple in one of the largest emerging mobile-phone markets and added to concern that the iPhone maker is charging too much in developing economies,” Frier reports. “Chief Executive Officer Tim Cook faced questions after last week’s earnings report over whether the iPhone’s pricing was going to limit growth overseas. He responded that Apple’s focus on product quality trumped other considerations. ‘I firmly believe that people in the emerging markets want great products like they do in developed markets,’ Cook said during the call on July 24. The goal ‘is to make the very best product, and that’s more important and overshadows all other things.'”

Frier reports, “Unlike in the U.S., Russian consumers typically don’t sign up for long-term mobile-phone contracts. So it’s less practical for carriers to subsidize the phone’s cost themselves the way AT&T Inc. and Verizon Wireless do… After making the remarks about Apple, MTS softened its criticism later in the day. ‘While we have differences with Apple, we have a constructive relationship,’ Joshua Tulgan, an MTS spokesman, said in a statement. ‘Smartphones like the iPhone are important to our customers and our economy and we want to get them into the hands of as many people as possible.'”

Read more in the full article here.

MacDailyNews Take: Come on, Latsanych has to at least understand the basics of the industry and the subsidized vs. prepaid markets, right?

[Thanks to MacDailyNews Readers “Sarah” and “cjpitt” for the heads up.]

21 Comments

  1. ‘Being arrogant with your partners in big markets doesn’t pay off.’

    A) ‘Being arrogant’ is a BS line used whenever insistence on sane behavior isn’t convenient for the observer. As we know, Russia = another Criminal Nation, thanks again to the total FAIL of so-called ‘communism’ to provide citizen creative incentives. Note the direct parallel with China: Criminal Nation.

    B) Insisting upon quality from service providers who offer one’s product ALWAYS ‘pays off’. What doesn’t pay off is screwing over the customer. Thus our being stuck in the ongoing worldwide economic depression. Its source cause continues to be The Spirit Of The Age in biznizz: Screw Thy Customer.

    BAM! Shot the OAO Mobile TeleSystems fracked up rant to hell! Bwahaha. Byte me Russia! 😆

  2. This has been Apple’s modus since day one.

    The Apple enthusiast stores could sell everything Apple, except the Mac itself. You had to go to Best Buys where the sales guy would push you to buy a POS Windblows PC.

    Apple has been boneheaded about this from day one.

  3. Wealthy russians buy their Apple gizmos from Finland, iPhone SIM-free is 600€ and they get the 23% VAT back as duty-free. It costs them less than half than in Russia. They are hoarding them from Helsinki and naturally russian operators don’t like it 😉

    1. An unsubsidized iPhone costs the same all over the world. About $375 for the 3GS, about $650 for the cheapest 4S. This is true on all continents. I have no clue what’s really going on in Russia, but for $1000 you can get 2 iPhones.

  4. So what do you actually get for $1000? What do you get for $120, as this guy claims?

    In the US on AT&T, the combined total for an iPhone over 2 years is something like $1656, which is the minimum out the door price for a 3GS of all things. This includes the most basic voice and data plan.

    On AT&T, there is no way you can get any manufacture’s smart phone with data and voice for less.

    I have a 64GB 4S, with unlimited data, minimal SMS, and voice. This costs me OTD $2415 over two years, not counting all the other accessories.

  5. “They’re more in a dictatorship mode ” And you Russians are not used to Dictartorship??? Lenin? Stalin? hehehe
    Kidding. To be honest, I have no idea why the iPhone can not cost 99 like in the US, Latin America, 89 Euros like in Spain, and so on. It is the same Apple as the rest of the world. Could it be that is your local government the problem and not apple?

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