Apple Inc. has gained unlikely allies in its bid to boost iPhone sales: Russian smugglers.
The device isn't sold by Cupertino, California-based Apple in Russia and it can't be used legally on local networks. Still, about 250,000 people own one, more than any other country except the U.S. and China, according to Eldar Murtazin, chief analyst at Moscow-based Mobile Research Group.
That popularity has turned into a bonanza for traders who sell the phones in kiosks and on the Internet for $1,000 each, more than twice the U.S. price. Hackers say they charge as much as 2,500 rubles ($105) to ``unlock'' them so they work locally.
"It's an icon for Russians,'' said Timofei Kulikov, a lawyer and buyer of electronic products for X5 Retail Group NV, Russia's largest supermarket chain. "If you see two businessmen at lunch in Moscow, they'll both have iPhones on the table.''
The evolution from Web-surfing, touch-screen gadget to status symbol has been a boon for Peter Aloisson. The jeweler sold a diamond-studded iPhone encased in white gold to a Russian businessman in March for 120,000 euros and is working on a 500,000-euro ($783,000) version that may go to another Russian client.
"There is no doubt that Russia, when it comes to luxury items, is by far the best marketplace,'' Aloisson, 47, said last week from his studio in Vienna.
Notable users include President-elect Dmitry Medvedev, billionaire Alexander Mamut and Boris Yeltsin Jr., grandson of the former president, according to the newspaper Kommersant. Medvedev's spokeswoman declined to comment.
Murtazin says about 20,000 iPhones arrive in Russia each month.
"They arrive in suitcases,'' Murtazin said. "Practically every flight from the U.S. brings new iPhones.''
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