Apple has agreed a distribution deal with Russia's largest mobile service provider, Mobile TeleSystems. The terms of the deal were not released, but it is anticipated that this will be a major territorial breakthrough for the Cupertino company.

Even though there are no official iPhones on sale around Red Square, Russia already has many hundreds of iPhones buzzing in and around all the happening vodka bars, as the latest Western capitalist iCon has rapidly become the status symbol d' jour for Moscow's upwardly mobile nouveau riche.

Monthly sales of 'imported' iPhones in Russia are estimated at about 20,000 and industry experts say the number of iPhones operating in Russia could total 700,000 by the end of 2008. Steve Jobs has stated that Apple hope to have iPhones on sale by October.

No doubt a big test will be to see just how comfortable the Russian's will be at coughing up Apple's slice of the licensing pie, especially once the iPhone sales get going and the Ruble's start rolling... particularly if the situation regarding the Red Army's occupation of the former Soviet state of Georgia is anything to go by.