Wednesday, December 17, 2014

Apple Halts e-sales in Russia Due to that Country's Continuing Economic Struggles...

Here's an interesting bit of info when you take into consideration the current situation facing the Russian Ruble.  Although economics is not my area of expertise, from what I understand, the current decrease in global oil prices combined with economic sanctions due to the Russian situation in Ukraine has begun to cause a bit of a meltdown in the Russian economy.

The value of the Ruble is falling dramatically and to help prop it up, the country recently increased interest rates to something in the neighborhood of 17%.

As the value of the Ruble falls, that means that the costs of American goods, goes up.  Recently Apple increased the cost of the iPhone 6 by 25% to help compensate for the drop in value of the Ruble.

Now comes word that Cupertino has decided to stop e-sales to the troubled country.

This is especially interesting because there are not many retail outlets for Apple products in Russia and there are NO Apple stores in the country.  That means that the bulk of Apple's sales in Russia come via e-sales.  Basically this means that the country now has an extremely limited access to Apple products.

In the big picture what does this mean?  It's hard to say, but I always like to see what the big boys do to help evaluate a situation.  It has been estimated that last year Apple sold 1 billion dollars worth of products in Russia.  When a company like Apple suddenly cuts off a huge chunk of that much money, I see storm clouds on the horizon for the Russian economy.

Thoughts?  I'd love to see some comments on this.

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