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Friday, August 22, 2008, 07:25 am PT (10:25 am ET)

Russian iPhone 3G deal demands 1.8 million sales per year

A Russian newspaper has reported that the top three mobile providers in the country have reached agreements with Apple to sell at least 1.8 million iPhones per year through 2011.

On Thursday, Reuters reported hearing from market sources that Mobile TeleSystems, the largest Russian mobile provider, has signed up to begin selling the iPhone 3G "with retail sales likely to begin in October."

The wire service cited business daily paper Vedomosti in reporting that MTS has committed to selling a million iPhones over the next three years, while the second and third place Vimpelcom and MegaFon have signed orders to each sell 1.5 million units per year over the next two years.

The paper also cited a source within one of the providers as saying that the iPhone 3G would be sold for $1000 without a contract; with a contract, the provider requires a "down payment for the smartphone with an initial instalment of $200."

The iPhone has never officially been sold in the country, but Reuters noted that it has "swiftly become a status symbol in the Russian capital." Unauthorized units "are being brought into the country in suitcases or sent by courier."

In an earlier report by Vedomosti, a local analyst said that such a quantity of iPhones would be almost impossible to sell, as it would amount to 12 percent of the entire Russian market in units and capture around a third of the market in terms of money.

In April, the Washington Post reported 500,000 iPhone users in Russia, making the country the third largest concentration of iPhones after the US and China. First generation iPhones were smuggled into Russia, cracked, given unofficial Russian language support, and originally sold for $1,800 before falling to around $700.