iPhones in Russia and China: A Trader’s Paradise

Why are Moscow and Beijing considered the iPhone trader’s paradise?

According to news sources, both China and Russia have a thriving market for “unlocked” iPhones adapted for local use, and users of the iPhone enjoy a super-exclusive status in both countries. Even Russian president, Dmitry Medvedev, has been seen in public using an iPhone. Experts estimate that only the United States has more iPhone users than Russia and China. It is thought that some 400,000 iPhones have been brought illegally into Russia since the first model was released last year. China is believed to have at least double that amount.

How come Russia and China have so many iPhones?

Russian and Chinese buyers aren't paying astronomical prices for their iPhones. Some purchase them when abroad, while others request them from friends traveling in the U.S. or Europe. Hong Kong is one of the few places that sell iPhones legally. The trick is the unlocking of the device, which requires a fee of about $100. This allows for local use on either Russian or Chinese networks.

Eldar Murtazin, of Moscow’s Mobile Research Group said:

“They are being brought into Russia in suitcases. No one is paying any sort of customs fees.”

Where can the average Russian and Chinese consumer purchase an iPhone?

Although Apple is still negotiating with mobile service providers in Russia and China, for those who know where to look, Apple’s iPhones can be easily bought (albeit for an arm and a leg). For $1,200, a mere six times the $199 US dollar base amount for Apple’s iPhone, a Russian can purchase an iPhone on various Russian websites. Even Apple’s newest iPhone, the first edition 8-gigabyte iPhone, is up for grabs in the Russian electronics market. Online auction sites in mainland China were also offering the new 16-gigabyte model the day of its release for $1,370.

Why hasn't Apple completed negotiations to bring the iPhone into Russia and China?

Apple has made several attempts to introduce its second-generation iPhones legitimately into China and Russia. Delays in negotiations are due to the flourishing black markets in both countries. It is hoped that these phones will be legally available in both China and Russia by the end of 2008.

So be patient, China and Russia. Legal iPhones are on their way.