Russia’s new law and its effect on Apple
Russian President Vladimir Putin signed new legislation requiring all smartphones, computers, and smart TVs sold in the country to come pre-installed with Russian software and have passed a law banning the sale of certain devices that are not pre-installed with Russian software.
Proponents of the law claim it will help Russian developers better compete with foreign tech firms and it is aimed at promoting Russian technology and making it easier for people in the country to use the gadgets they buy. The law will come into force in July 2020 and cover smartphones, computers and smart televisions.
But there are concerns about surveillance and fears that firms could pull out of the Russian market. The law will not mean devices from other countries cannot be sold with their normal software – but Russian “alternatives” will also have to be installed. A complete list of the gadgets affected and the Russian-made software that needs to be pre-installed will be determined by the government.
It’s still unclear how tech companies will react to the news, although Apple has previously threatened to pull out of the Russian market if a complete ban on selling its products without pre-installed apps was introduced, Russian media reported earlier this year.
Apple is doing great in Russia until now. The revenues of the Russian subsidiary of Apple Inc. — Apple Rus LLC — amounted in 197.2 billion rubles ($3 billion) in 2018. This is 30% more than in 2017 when the company earned 151.9 billion rubles ($2.3 billion).Also in 2018, the company’s profit from product sales increased by 1.5 times and amounted in 5.77 billion rubles ($89 million) as reported by RBC media.
New legislation that will ban consumer gadgets that do not come preinstalled with Russian software is now being characterized as a “law against Apple.” In short, the new law means that device manufacturers will need to open their platform to preinstalled software—and that includes smartphones, tablets, computers and smart TVs.
“Informally,” Russian weekly The Bell explained last month, it is called the “law against Apple” as the company never preinstalls third-party applications in the iOS operating system and warned that if adopted, it could leave the Russian market.”
Apple’s representatives have reportedly warned Russian officials of those likely implications, with Russian media reporting that they suggested it could lead to the Cupertino giant “revising its business model in Russia.” Officials did not take kindly to the implied threat, pointing to the example of China where restrictions have been accepted by leading Western tech giants, including Apple. But Russia is not China; the business impact on Apple would be much more limited and manageable.
