Will sanctions prevent Apple products from reaching the Russian market?

On March 2, 2022, Apple, among others, officially announced the suspension of sales in Russia. 

Since then, the official Apple Online Store has been unavailable in the country, all shipments of devices have been stopped, and Apple Pay has been blocked. However, iPhones and MacBooks are still sold in Russia through other means. 

But soon, the trade will be legal and all products will be available, including the new ones presented on June 6. 

They will be imported into the country using the parallel import schemes, especially through friendly countries and neighbours like Kazakhstan. 

New products 

On June 6, Apple introduced the new MacBook Air and MacBook Pro with the M2 chip, which will have 25 percent more transistors and 50 percent more memory bandwidth than the previous Apple M1 chip. Apple, however, did not give an exact release date for the laptops. We only know that they will come out next month and that production has been slowed down due to the quarantine in China.

Also, the company has presented a new software, iOS 16, for the iPhone. The lock screen received most of the changes: it will become more personalized, will allow you to customize the font and colour of the time and date, there will be animated backgrounds and notifications will be moved to the bottom of the screen. The new software has been announced for the Apple Watch (watchOS 9), iPad (iPadOS 16) and Mac (macOS Ventura) as well.

In addition, the service Apple Pay Later was mentioned: it will allow fans of Apple devices to pay for purchases in four deferred payments within six weeks. For now, Apple says that no fees will be charged. 

The price of a 'gray[АХ1]'  iPhone

Although the company has pulled out from the Russian market, iPhones, particularly the SE 3 model, were brought to Russia through markets like Kazakhstan and put on sale in the country a month ago. Also, since then, people have been able to buy the iPad Air (5th generation) with an M1 processor and Mac Studio computers, too. The thing is that these devices, at Apple's request, passed all the necessary certifications in March 2022, including formal notification from the FSB.

 But another reason for these sales is probably money. For example, the smartphone cost in May was 40-60 thousand roubles, depending on the supplier. Although at the Apple presentation in March, it was announced that its minimum price was $429: at the exchange rate at the time, it was about 30 thousand rubles. 

At the same time, the corporation did not name the recommended price of the iPhone SE in Russia, since the shipments of their goods to the country had been stopped due to the sanctions.

 Nevertheless, as of today, prices at official Russian retailers have dropped to almost the same level as in February. 

"The reason for the stabilization is not so much the currency exchange rate as the fact that demand has dropped many times after the March peak. The Russian consumers have simply bought up everything they wanted for a long time," explains market expert Nikita Goryainov.

Economist Dmitry Prokofyev also reports: "Now, for example, a lot of computer equipment, which was intended for Kazakhstan, is being sold in Russia. It is still unclear how all the countries from where goods are imported to us will behave. The EU is likely to allow a lot to be smuggled in. China also wants to profit off of the Russians and sell their products since we are in this kind of situation.

TelecomDaily analyst Ilya Shatilin says that even before the restrictions, Apple products often found their way to Russia through unofficial channels. However, it used to be a way to buy a smartphone for a lower price, not the only way to buy it. Accordingly, sellers, taking advantage of the shortage and the inability to buy a smartphone through official channels, can make good money. 

In addition, on June 7, the State Duma passed a bill on the abolition of liability for importing foreign goods without the consent of their rights holders. This means that the import of smartphones, consoles and cars included in the register of goods available for parallel import will no longer be considered a violation of Russian law, specifies economist Prokofiev.

 Against all odds

It is noteworthy that on the same day, June 7, it became known that Inventive Retail Group company, which owns stores of Apple, Lego, Samsung and Nike, will remain on the Russian market, despite a significant reduction in the number of stores. 

"Of course, we will greatly reduce the number of stores and the scale of operations, there's no getting away from it in our specific situation," said the head of Inventive Retail Group, Tikhon Smykov, during the “Russian Retail Week”. - But we will remain on the market and will do everything to ensure that Russian consumers live normally and have access to the products they need every day". According to Smykov, switching to a parallel import scheme must not lead to total degradation of product quality.

 All this is likely to benefit not only foreign businessmen but also the Russian government. 

"Against all odds, the authorities do not want shop windows on the streets of major cities to become empty. The shortage of the usual range of goods is the very first signal to people that something is going wrong. They don't want to allow that," Prokofyev is sure. 

About goods from parallel imports, he adds: "It's better, the authorities believe, to have expensive goods, with service problems, but to have them in stock anyway." 

Remarkably, in January, Apple's share of the Russian smartphone market, according to the Svyaznoy store, was 16.8 percent in terms of volume and 44.6 percent in terms of money. In 2021, according to the retailer's estimates, 4.4 million Apple smartphones worth 333.6 billion rubles were sold in the country. This is 20 percent more in terms of volume and 52 percent more in terms of money than the year before. 

Dissatisfied consumers

Regarding this topic, we should mention the fact that in early March a lawsuit against Apple was filed: the organisation "Public Consumer Initiative" demanded to recognize the wrongful acts of the defendant, who had suspended the import, sale and maintenance of products in Russia, to compel the company to stop them, as well as to seize the accounts and property of "Apple Rus".

The head of the public organization, Oleg Pavlov, then reminded us that under Russian law, no company has the right to terminate its activities without meeting its warranty obligations. We are talking about repairs, replacements, refunds, and compensation for losses caused by substandard goods.

Expert Nikita Goryainov says: "The official position of authorized service centres has not changed: they still perform both warranty and non-warranty repairs of iPhones, iPads, Macs, and branded Apple accessories. However, he believes that the real situation at the moment is tricky, "I’ve also heard some information about some of the centres being frankly unhappy with Apple's behaviour in the current situation." 

Goryainov explains that repair of Apple devices is now possible but difficult both in terms of time and in terms of getting positive outcomes. Each situation is now considered individually, and the general, predictable scheme of the usual service does not work now. Understandably, this turns consumers away from technology, even if they are used to it.