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Windows Phone Popularity Allows Russia's Largest Carrier to Drop iPhone


OAO Mobile TeleSystems discontinued sales of iPhones because of restrictive subsidies, and because of Windows Phone's success in Russia.

Editor's Note: This content was originally published on by Louis Bedigian.

OAO Mobile TeleSystems, the largest cellular service provider in Russia, has no desire to go back to carrying Apple's (NASDAQ:AAPL) iPhone.

The carrier (which is also known simply as MTS) dropped the popular smartphone last year after enduring years of high subsidies.

"Apple wants operators to pay them huge money, subsidizing iPhones and their promotion in Russia," Andrei Dubovskov, CEO of MTS, told Bloomberg. "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."

MTS was able to drop the iPhone after experiencing a massive sales increase from Microsoft's (NASDAQ:MSFT) Windows Phone platform.

During the first quarter, Windows Phone handsets accounted for 8.2% of all smartphones sold in Russia, amounting to sales of 315,000 units. One year earlier, Windows Phone devices only accounted for 5.1% of all units sold.

Comparatively, Apple's share of the market dropped from 9% to 8.3%. This reinforced the belief that MTS had made the right decision.

"Those MTS users who need the iPhone are buying it one way or another -- in a gray market or from independent retailers -- and are still generating data revenue for us," Dubovskov told Bloomberg.

This is not the first time that Microsoft's mobile platform has encroached on Apple's territory. Earlier this year, Windows Phone outsold the iPhone in seven nations. At the same time, Windows Phone outsold BlackBerry (NASDAQ:BBRY) in 26 different markets.

According to CNET, Windows-based smartphones are also outselling the iPhone in Estonia.

In December, DigiTimes Research projected that Windows Phone would grow 150% in 2013. That same report also said that BlackBerry could end up with just 3.7% of the smartphone market.

Thus far, BlackBerry has not been breaking many sales records at retail. The company did break a few investors' hearts, however, when it announced that it had sold 700,000 fewer units than expected.

Windows Phone may be doing well in select markets, but it has a long way to go before it can catch up to the iPhone's overall sales achievements.

During the March quarter alone, Apple sold 37.4 million iPhones.

Comparatively, Nokia (NYSE:NOK) -- the primary manufacturer of Windows-based smartphones -- sold 5.6 million handsets.

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Twitter: @Benzinga

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Disclosure: Minyanville Studios, a division of Minyanville Media, has a business relationship with BlackBerry.
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