Feature Article

August 01, 2012

Apple Criticized by Russian Wireless Executive as a 'Dictatorship'

One of Russia's largest cell phone carriers is blaming Apple for the poor sales of the iPhone, comparing some of Apple's distribution tactics to a “dictatorship.” OAO Mobile TeleSystems (MTSS), the iPhone's largest distributor in Russia, says that for starters, the iPhone is too expensive – about $1,000 in that country – and that customers are choosing cheaper options. In addition, an executive for OAO was quoted as saying other demands Apple makes – a minimum standard for retail locations – are also affecting sales.

“They’re more in a dictatorship mode where they say, ‘This is what you have to do or you don’t get the iPhone,’” said Vasyl Latsanych, OAO Mobile TeleSystems' vice president of marketing, at a Moscow-based event yesterday. “Being arrogant with your partners in big markets doesn’t pay off,” he added.

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, reported Bloomberg today. Apple's CEO, 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 earnings call, which was held on July 24. The goal “is to make the very best product, and that’s more important and overshadows all other things,” he added.

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Edited by Brooke Neuman

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