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iPhone market share in Russia set to be boosted by Megafon deal

Russia’s second largest carrier has agreed to purchase at least 750,000 iPhones from Apple over the next three years.

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Apple’s iPhone has a chance at more market share in Russia, after Apple signed a deal with one of the country’s major carriers.

It’s a major win for Apple, which lost Megafon back in 2009 over a disputing related to sales guarantees. Since then, Russia’s second largest carrier has shunned the iPhone, until now.

 750,000 iPhones will be purchased over the next three years and will be sold through the carrier’s retail network in Russia. Terms of the contract have not been disclosed, but Megafon has agreed to guaranteeing purchases and has also committed to earmarking funds which will greatly aid Apple’s mission of expanding the iPhone’s market share in Russia.

$28 million will be spent by Megafon on promotion, marketing and advertising of the iPhone during this three year period which ends in 2016. Raiffeisen Research analyst Sergei Libin believes that the minimum sales volume that Megafon has committed to Apple is reasonable, and that the carrier is capable enough of selling it. There is a lucrative market for iPhones in the country. Estimates from the fourth quarter show that roughly 650,000 iPhones were sold in Russia during the last quarter alone, and its projected that as many as eight million units will be sold over the next three years, thus Megafon’s share would stand at roughly nine percent.

It is estimated that the Russian smartphone market is worth $5 billion, and Apple is believed to have a 20 percent share of that. In terms of units sold last year, Apple holds nine percent unit share in the smartphone market of Russia. Its aided by Megafon’s rival Vimpelcom, which signed a direct contract with Apple last year. MTS, another major Russian carrier, does not have a contract with Apple but it sells iPhones that it buys from distributors. MTS says its negotiating a deal with Apple, and if its able to carve something out, then the iPhone’s position would be strengthened even further.

Source: Reuters

Adrian Fonseca
Adrian Fonseca keeps a close eye on all Apple news, rumors, leaks and developments. In his spare time, he likes to read books.

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