Submitted by Frank Macey on
Large swings in the value of Russian currency have prompted Apple to stop sales on its online store in the country. An Apple spokesman told Bloomberg the company was going to "review pricing" after the ruble plummeted almost 20 percent yesterday.
While there are still no retail stores in the country, the Russian Apple Online Store has been in business since June 2013. The suspension of sales is not the first time Apple has taken currency-related action. In November Apple increased iPhone prices in Russia after monitoring changes in the ruble.
The strengthening US dollar also affects Apple's business around the globe. According to Bloomberg, Apple's Chief Financial Officer Luca Maestri spoke to analysts on October 20:
"It’s a fact of life if the U.S. dollar strengthens, that creates a headwind for us both in revenue and margins for our business outside of the United States. We have a comprehensive hedging program in place that mitigates the impact of foreign exchange. Over time, of course, these hedges roll off and get replaced by new hedges at new spot levels, and so the protection that you get from a hedging program is temporary."
Russia's central bank increased interest rates from 10.5 percent to 17 percent in an attempt to stem the ruble's fall. However the crisis has not abated, with the currency collapse continuing as the market reacts. It's not clear when Apple will reopen its online store in Russia, which is expected to fall into economic recession in 2015.
Apple's Russian iPhone sales doubled in 2013, clocking 1.57 million units. Carriers such as Mobile TeleSystems, VimpelCom and MegaFon are all offering iPhones to Russian consumers.