By Alex Rodriguez Chicago Tribune
05/01/08 8:51 AM PT
The iPhone is one of the ultimate status symbols in Russia these days. Although they can't be used legally on local cell phone networks, more than 300,000 Russians own iPhones, which are selling in some stores for as much as $900.
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Status symbols in Russia never stay the same for very long. During the Soviet era, the holy grail was a pair of blue jeans.
When runaway capitalism took hold in the post-Soviet 1990s, a BMW served as ample proof to fellow Muscovites that you had rocketed out of the days of government-decreed uniformity like a cosmonaut. Today in Moscow, it's the iPhone that's the must-have for every status-seeking Russian.
In theory, there should be a problem with that. Apple (Nasdaq: AAPL) doesn't officially sell iPhones in Russia, so they can't be used legally on local cellular phone networks. However, in Russia, where hackers are about as common as bowls of borscht, that was an obstacle sidestepped not long after iPhones hit the market.
A Big Black Market Item
Today, more than 300,000 Russians own iPhones, says Eldar Murtazin, chief analyst for the Moscow-based Mobile Research Group. The devices are smuggled into Russia from America at a rate of 20,000 per month, Murtazin says.
"iPhones are one of the biggest black market items in Russia," Murtazin says. "When you think about the mentality of Russians, when someone bans a product for use in this country, that's when people start to want it. It makes them feel unique."
'Yes, They're Illegal'
A stroll through Moscow's Gorbushka mall, a place with a long history of plying black-market goods, shows just how easy it is to snag a working iPhone.
Aisle after aisle is lined with small storefront windows displaying iPhones priced at between US$710 and $900. (Apple's Web site lists the 8 GB iPhone at $399 and the 16 GB model at $499.) The iPhones at Gorbushka have already been hacked, making them ready for use with Moscow cell phone networks.
At one storefront, a 20-something salesman dressed in black explains that the illegality of using iPhones as cell phones in Russia is nothing to fret about.
"Even our ministers use iPhones," he says. "We get these from the U.S., and yes, they're illegal. But all the phones you see here are illegal. This is normal."
doesn't officially sell iPhones in Russia, so they can't be used legally on local cellular phone networks. However, in Russia, where hackers are about as common as bowls of borscht, that was an obstacle sidestepped not long after iPhones hit the market.
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