Apple Inc.'s latest iPhones were available in nine countries when they launched Friday. But they missed a big one.
While the devices are available in China, they didn't officially go on sale in Russia, a key emerging market where the latest iPhones typically don't ship until months after the launch. This means that the so-called gray market of imported phones undermines sales by local carriers, leaving Apple behind in Russia at a time when it needs to boost sales in emerging markets.
Smartphone shipments grew by nearly 30% to 14 million last year in Russia, the tenth-largest wireless market, according to market-research firm Canalys. Meanwhile, Apple's market share in the country was flat at 7.7%—short of its 19.5% share of the world-wide market—while rival Samsung Electronics Co.'s share grew to 43% from 25%, according to Canalys. And the gap has widened so far this year.
Apple's market share in other emerging countries where the latest iPhone isn't immediately available also tends to be lower than its world-wide average—in India and Brazil, for instance, Apple's smartphone market share last year was 2.7% and 12.2%, respectively.
Russia's big service providers—VimpelCom Ltd., Mobile Telesystems and MegaFon —formerly carried the iPhone, but they have let their contracts lapse after getting stuck with obligations to buy large volumes of the phones.
Executives at Russian carriers say they continue to talk with Apple about signing new contracts, but talks are stalled over Apple's demand for steep volume commitments that carriers have to cover whether or not they can find buyers for the phones.
Meanwhile, carriers have strong incentives to promote rival phones. Samsung and Nokia Corp. help build loyalty among carriers with deals under which customers buy the phone and get several months of data service free, covered by payments from the manufacturers to the carrier.
Apple declined to comment. Chief Executive Tim Cook played down the carrier situation in a conference call in July, noting that more than 80% of smartphone sales in Russia are sold through retailers outside of carrier-owned stores. He said that iPhone activations in the country set a record in the most recent quarter.
The major Russian carriers don't subsidize smartphones for customers in exchange for long-term contracts, unlike in the U.S., thus reducing the incentive of buying the phone through the carrier.
Even without carriers in the game, trendy Muscovites weren't left far behind in the race for the new iPhone Friday—as long as they were ready to pay well beyond the U.S. sticker price.
Official sales aren't expected to begin in Russia before December, but eager shoppers who don't want to wait that long have been scrambling to snap up units flown in from countries where they are already on sale.
"We've had many calls, mostly from young women who want the golden iPhone 5S," said Vladimir Boyarinov, a manager at doniphone.ru online shop, which already had 25 orders for the iPhone 5S as of Friday afternoon. "They say the price isn't important to them."
The phones were to be bought in Frankfurt, Mr. Boyarinov said Friday, as flight schedules allowed him to get the phones to the customer's door by the evening that very day. The top model, with 64 gigabytes of memory, was offered for 70,000 rubles ($2,200) on doniphone.ru. In Frankfurt, that phone sells for €899 ($1,200).
Outside GUM, a luxury store on Moscow's Red Square, glamorous girls had been distributing cards all of last week promising fast delivery of Apple's latest must-have. Some of the phones are flown in from the U.S., a sales manager said Friday. The top model there costs $849 plus tax without a contract.
Russians also lined up around the world to buy the phones themselves. In Paris, a group of up to 50 Russians spent Thursday night in line on a sidewalk waiting to buy phones.
"People are really into Apple in Moscow," said Alex Ugolnikova, a 23 year-old mathematics student at Moscow State University who camped outside an Apple store in New York hoping to buy the new phone for herself and another as a gift for a friend's mom.
That gray market flow of phones made it tough for Russian carriers to meet their volume commitments under contracts signed with Apple in 2008. Those agreements—now expired—required MTS and VimpelCom to each buy 1.5 million iPhones each over several years.
As of the end of 2012, MTS had bought only 40.6% of that agreed-upon amount, according to a regulatory filing, and the company has warned that Apple may bring a claim against the company for the shortfall. As of early 2011, VimpelCom had purchased only about 540,000 iPhones, meeting about 36% of its own commitment.
Despite those results, executives at Russian carriers say Apple continues to insist on volume commitments for new contracts, with one noting that the two sides are "not even close."
—Drew FitzGerald and Inti Landauro contributed to this article.
Write to Thomas Gryta at thomas.gryta@wsj.com and Alexander Kolyandr at alexander.kolyandr@wsj.com
via apple - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNFTUXdBQzX_gKzQi_fRuBuACGju-w&url=http://online.wsj.com/article/SB10001424052702303983904579094990513492948.html
Posts
0 comments:
Post a Comment