The country's largest provider, MTS, said it was dropping the iPhone because of the high subsidy costs incurred as an Apple partner carrier, Apple Insider reported Wednesday.
"Apple wants operators to pay them huge money, subsidizing iPhones and their promotion in Russia," MTS Chief Executive Officer Andrei Dubovskov said. "Now it's not beneficial for us. It's good we stopped selling the iPhone as these sales would've brought us a negative margin."
Duties and taxes are higher in Russia than in much of Europe, so an unlocked 16GB iPhone 5 sells for roughly $925 on the just-opened Russian Online Apple Store, $276 more than an identical phone in the United States.
Apple says $140 goes to the Russian Value Added Tax while the remaining $129 is for foreign exchange rates, import duties and distribution markup.
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