Russians, who for years endured some of the highest prices for Apple Inc’s iPhone, can buy the latest model for less than what shoppers pay elsewhere in Europe.
Russians have often been found in queues outside Apple stores in London and Frankfurt during product debuts. Now, thanks to the ruble’s decline in recent months, iPhone prices in Russia are the lowest in Europe when measured in US dollars or euros, according to Russian handset retailer Svyaznoy.
In ruble terms the sticker price has not changed. An iPhone 6 without a carrier contract starts at 31,990 rubles (US$700), relatively high for many Russians. However, after the ruble’s 25 percent slide against the US dollar and 18 percent drop against the euro in the past four months, the Russian price has dropped below that of other markets. In neighboring Finland, long a popular destination for Russian iPhone shoppers, the iPhone 6 costs local shoppers about 700 euros (US$870).
“Gray-market imports have been a serious competition factor for our stores in St Petersburg, where people could travel just 100km across the Finnish border and buy anything ranging from clothes to gadgets,” said Lyudmila Semushina, a spokeswoman for the re:Store chain, an official Apple reseller in Russia. “Now, it probably makes sense to smuggle suitcases of iPhones in the opposite direction.”
Russian prices still do not beat the US, where the iPhone 6 without a carrier contract starts at about US$650 before taxes.
The ruble has fallen amid US and European sanctions against Russia over Russian President Vladimir Putin’s alleged role in the Ukraine conflict and a drop in the price of oil. The currency traded at 46.45 to the US dollar and 57.64 to the euro at press time last night.
About 1.93 million iPhones worth an estimated US$1.3 billion were sold in Russia this year through September, according to research firm IDC. They accounted for 10 percent of the Russian smartphone market by units, up from 8.9 percent last year, IDC added.
Russians have increased their iPhone purchases in recent weeks, said Maria Zaikina, a spokeswoman for Moscow-based Svyaznoy, which accounted for two-fifths of Russia’s iPhone sales last year. Consumers are fretting that the ruble’s drop will push up the device’s price, she said. Prices for some Western products have already risen in Russia, as they have become more expensive for wholesalers and retailers to purchase.
On Monday, the Russia’s central bank decided to float the currency and shield it from speculators.
The move, which aims to spare the central bank from spending billions in reserves on supporting the currency, highlights the extent of Russia’s economic decline. The nation appears to be sliding toward recession. Investors are pulling money out or seeking the safety of foreign currencies.
The central bank said it would also stop intervening every day in the market to keep the currency up.
To do that, it said it would limit loans to banks that use the money to buy US dollars. Central Bank of Russia Chairperson Elvira Nabiullina also said it would intervene “at any moment in the amount necessary to counter speculative demand.”
The bank had foreign-exchange reserves of US$510 billion at the start of the year, but they stand at US$400 million now. It spent US$30 billion last month alone.
Additional reporting by AP
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