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Screwball ruble closes Apple's Russia store, whole kit and caboodle

Crazy exchange rates force iGiant to give up for now

Apple has temporarily halted online sales in Russia while the country remains in an economic free-fall.

The iPhone giant said "extreme" fluctuations in the value of the ruble forced it to shut its shopping website in the Putin-led country. Apple said it will review its pricing before reopening the site for sales.

The ruble saw its value against the dollar fall as much as 20 per cent over the past 24 hours.

The problem, from Apple's end, is the currency exchange: it can't keep up with the shaky coin.

If Apple prices a $500 iPhone at, say, 35,000 rubles, when the Russian currency takes another tumble in value, those rubles are going to be worth way less than 500 bucks, so Apple loses out. The Cupertino giant could keep upping its prices in the Russian currency, or it could give up for the moment.

The Russian government has been scrambling to adjust bank rates and take other measures to halt the plummeting value of its money. Economic analysts blame the free-fall in large part on a drop in oil prices – exports of oil and gas remain Russia's biggest economic exports; a drop in fuel prices is having a devastating effect on the nation.

Apple is known for its magical exchange rates, such as converting dollars to pounds sterling on a near one-to-one basis. But in this case, the extraordinary drop in the value of the ruble has proved too much for Apple, prompting extraordinary measures.

While Apple does not disclose sales figures for Russia, the country is part of a European business unit that collected $9.5bn in revenues last quarter. Any prolonged halt to sales, or drop in currency returns, could well show up as a blip in the company's next set of financial statements. ®

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