Consumers in Russia are finally feeling the full effects of sanctions imposed on the country over its participation in the standoff in Ukraine. Sanctions have gone a long way in devaluing the country’s currency, resulting in a number of companies led by Apple Inc. (NASDAQ:AAPL) opting to increase prices of their products. Bloomberg’s Francine Lacqua reports that iPhone 6 lovers in Russia will have to pay more if they are to own the evolutionary product.
“Apple Inc. (NASDAQ:AAPL) is raising the price of its iPhone by 25% in Russia. Until now the massive drop of the Rubble had attracted tourists from other countries to buy the iPhone 6 in Moscow. Apple’s Move comes a day after Samsung cut the costs of its competing smartphone. The iPhone now Costs 60% more than the galaxy S5 in Russia, “said Mrs. Lacqua.
Apple Inc. (NASDAQ:AAPL) had refrained from raising the price for iPhone 6 even as the dollar continued to make substantial gains against the embattled Ruble. Price for iPhone 6 was initially the lowest at $700 compared to other European countries, prompting tourists to stream into the country just to acquire it. There is no doubt that Apple’s sales in Russia will be affected as a result of the increase as more people will likely opt to make the switch into other cheaper products offered by Samsung and Sony Corp (ADR) (NYSE:SNE).
Apple has always dominated smartphone sales in Russia against its fierce rival Samsung seen by sales of up to $1.32 billion for the first nine months, compared to Samsung $1.19 billion. It awaits to be seen the amount of revenue that Apple will generate heading into the busy holiday season. Apple Inc. (NASDAQ:AAPL)’s move to increase iPhone prices may also encourage other brands to follow suit this holiday season once their earlier stocks get exhausted.
Russia’s standoff with the west has only gone to cause an increase in the country’s inflation; the highest seen since 2011 considerably affecting the purchasing power of most of the citizens. Increase in price for iPhones may also affect Apple’s market share.
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