Apple has suspended sales of its products in Russia after the world’s most valuable company led a number of other American brands to boycott the country following its invasion of Ukraine.
Apple said it would suspend all product sales and block access to state media Russia Today and Sputnik from the iPhone App Store outside the country.
Automaker Ford told its Russian joint venture partner on Tuesday it was suspending operations in the region until further notice, while sportswear maker Nike suspended orders through its website and mobile app in the country. , saying it could no longer guarantee deliveries.
Walt Disney and Warner Bros delayed the release of new films in Russian cinemas earlier in the week.
These measures underscore the abrupt shift of Western companies from operational concerns associated with the invasion of Ukraine – such as the safety of Ukraine-based personnel and how to pay personnel in Russia – to questions about the risks of reputation associated with the status quo.
“Key stakeholders, including employees and customers, all want to know where you stand and frankly, there is only one position,” said Simon Freakley, managing director of AlixPartners, a consulting firm. American council.
“The temperature is rising pretty quickly,” said Steven Fox, founder and chief executive of Veracity Worldwide, a strategic intelligence group working with clients in Russia.
Growing expectations for corporate social responsibility have put particular pressure on consumer brands “to be seen to be doing something before being pressured by customers or on social media”, a- he declared.
Some American brands that symbolized Russia’s opening to the west after the Cold War, including Levi Strauss, Coca-Cola and PepsiCo, were still reviewing the situation on Tuesday.
Several consumer-oriented companies, including Estée Lauder, Kimberly-Clark and Mondelez, had named Russia as one of their fastest-growing markets in recent months, but advisers said the sudden economic isolation of the country had changed the view of multinationals on the risks and advantages of Russia.
Apple’s decision to block Russia Today and Sputnik came after Facebook, YouTube and TikTok blocked them in Europe, while Google removed Russian state media from its news search results.
Customers cannot make purchases from the Russian version of Apple’s online store, which lists products, including the latest iPhones, as “currently unavailable”.
Apple said on Tuesday it stopped exporting products to Russia last week. It also followed Google Maps by disabling live traffic updates on its mapping app in Ukraine, which some feared posed a risk to civilians by highlighting crowded areas.
Last week, Mykhailo Fedorov, Ukrainian Deputy Prime Minister, tweeted a letter to Tim Cook, CEO of Apple, asking him to “stop supplying Apple services and products” to Russia, in order to rally the opposition of Russian youth.
The tech companies’ rift with Russia intensified further on Tuesday as Snapchat parent Snap said it would stop running ads in the region.
Poppy Wood, a former technical adviser to 10 Downing Street, said the corporate response to the Russian invasion has highlighted a new era in which previously neutral players, including tech companies, realize they need to review their modus operandi and side with the West.
“Last week we saw the biggest change in German foreign policy in decades and the Swiss are no longer neutral,” she said. “You can no longer sit back and say, ‘Sorry, we’re service providers, we’re not countries, we’re companies.’ It won’t fly anymore.
Russia is not a big market for Apple. The iPhone has a market share of around 15% in the country, where total smartphone sales reached around 32 million devices last year, according to Counterpoint Research. This suggests that Russians bought about 2% of the more than 220 million iPhones sold worldwide each year.
Last year, the App Store in Russia generated $694 million in consumer spending, which is less than 1% of Apple’s global services revenue, according to Sensor Tower.
All smartphone manufacturers selling their products in Russia are required to notify the Federal Security Service (FSB), Russia’s national security agency. The FSB oversees all imports into Russia of encryption technology, such as the iPhone’s “Secure Enclave” chip that powers Apple Pay, biometrics and other security features.
Like other IT vendors, Apple has been exempted from US restrictions on doing business with the FSB, which were introduced last March when the agency was designated as a proliferator of weapons of mass destruction.
Additional reporting by Steff Chávez in Chicago and Matthew Rocco in New York