Russia is facing major economical crises as its official currency Ruble has lost more than 50% of its value this year, which has made Ruble the worst-performing currency globally. Foreign currency orders are at its peak as citizens attempt to move their funds to something more stable than Ruble. Ruble values at 80 per dollar and 100 per Euro. The uncertainty and the instability in the market are forcing many businesses to proceed carefully. However, one company that has decided not to proceed at all is Apple.
Apple Inc. (NASDAQ:AAPL) had recently opened an online store in Russia, but due to the instability of Russian currency the tech giant has decided to stop selling its products in the country for the time being. Apple does not have a retail store in Russia so all the hardware was sold online but now the online sales will come to a halt until Apple revisits its decision. Apple said that they are reviewing the pricing of their Russian store.
Prior to withdrawing online sales in Russia, Apple had tried to deal with the situation by increasing iPhone prices by 25% in an attempt to balance out the falling value of Ruble but the interest rate in the country rose by 7.5% overnight. The interest rates were increased to stabilize the country’s economy but it is not favourable for the businesses and therefore it is no wonder that Apple does not have faith in the Russian market. Given the circumstances Apple’s decision of taking its hardware down from the online store makes sense.
Apple’s spokesperson Alen Hely wrote in an e-mail that the company is taking its products offline for as long as it completes the process of evaluating its pricing. Hely also apologised to the customers on behalf of Apple for causing any inconvenience.
Andrew Bartels, an analyst at Cambridge Massachusetts-based Forrester Research Inc. said that anything that is earned in Ruble will come to dollars or Euros at a very low value and rates so it is best for tech vendors to pull back from Russia just like Apple did.
Currently there is no Apple in Russia and its return cannot be predicted as of now. Apple’s return might depend completely on the country’s economy and if Russia succeeds in bringing Ruble back from the pitfall than Apple’s return can be expected.
Apple Inc. (NASDAQ:AAPL) is a huge company and has a huge market worldwide. Its products especially iPhones and iPads are top line products and are extremely popular all over the world. Therefore losing customers in one country will not have much of an impact on Apple; however still the company would like to regain its sales in the region as soon as possible.
However, the decline in Russian economy is something that needs attention as businesses as well as the citizens of Russia are losing faith in its economy. It is a tough time for the country’s leadership and Vladimir Putin faces dilemma in the form of oil and Ruble. What is to be seen now is how Putin will deal with the economical crisis and whether Apple will decide to start selling its products in Russia again or not.
