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Russians bulk buying iPhones in UAE to sell back home

Pen, Adult, Male Reuters/Tatyana Makeyeva
Apple fans in a central Moscow store in 2020. One Dubai store owner says business went up 'at least 45%' last year from sales to buyers stocking up to sell in Moscow
  • Russian retailers listing iPhone 15
  • Grey market purchases likely source
  • UAE big ‘parallel market’ for Russia

Last year Apple officially stopped all product sales on its Apple store in Russia in response to the Russian invasion of Ukraine.

Despite this, Russian telecom operator MTS and Russian e-commerce sites are already accepting pre-orders for the iPhone 15 – to be unveiled by Apple CEO Tim Cook on Tuesday – and some of these are likely to have made their way through parallel markets such as the UAE. 

The term “parallel imports” refers to goods that are first sold in an overseas market with a brand owner’s authorisation, but then imported into another market without the brand owner’s permission.

Saint Petersburg-based telecom analyst Ilja Shatilin tells AGBI that the UAE and Hong Kong are “big parallel import markets” for iPhones on the Russian market and devices arrive “in bulk quantities”.

Shatilin adds that although grey market sellers initially sold at a significant markup, the number of iPhone 14 models that became available in the Russia last year “was so large that prices dropped below Apple’s original price”.

AGBI spoke to 10 electronics retailers in the UAE who say they regularly sell Apple devices, including iPhones, to Russian nationals. The buyers take the phones back to their country to replenish supplies at stores or sell online themselves.

One store owner in Dubai, who declined to be named, says his business went up “at least 45 percent” in 2022 from sales to buyers stocking up to sell in Moscow. 

“They would order 300 to 400 Apple devices from me every month,” he adds.

Although the retailer expects orders for the iPhone 15 from Russian buyers will be strong, he says they are likely to be lower this year as a result of competition with other parallel markets that are “more convenient and cost effective” because they have land borders with Russia.

Apple's Tim Cook will announce the new iPhone 15Reuters
Apple’s Tim Cook will announce the new iPhone 15 this week
Circumventing sanctions

The EU, the US and other Western countries introduced or expanded sanctions against Russia in response to its aggression against Ukraine at the beginning of 2022.

Multiple global brands halted sales or stopped exports to Russia to comply with sanctions – but the Russian government introduced a parallel imports scheme to circumvent trade restrictions.

Russia’s minister of industry and trade Denis Manturov said in August last year that parallel imports to Russia would reach $16 billion in 2022, equivalent to four percent of 2021 overall imports.

Apple sold around $1 billion worth of iPhones in Russia during the first half of 2023, suggests the Russian Briefing from consulting company Dezan Shira & Associates.

It said Russian imports of iPhones jumped by 15 percent year on year in the first half of 2023, amounting to 1.1 million devices, according to data by the analytical centre of Russian industrial investment company GS Group.

Chris Devonshire-Ellis, chairman of Dezan Shira & Associates, tells AGBI that Turkey, Armenia, Georgia and Kazakhstan are among the main parallel markets from which Russian retailers have been importing iPhones and other Apple products.

The Russian Briefing analysis says that while iPhone sales are seen as sanctions-compliant by US authorities, as Apple does not sell directly into the Russian market, the EU has been less flexible.

The UAE has condemned the invasion of Ukraine at the United Nations, but does not impose sanctions on Moscow. It has become a key destination for Russian tourists and investors since the conflict. 

For example, real estate agency Betterhomes reported that in the second quarter of 2023 Russians represented the third-largest nationality of buyers in Dubai.

Bloomberg, meanwhile, reported earlier this month that the EU is expected to ramp up demands that the UAE stops being a gateway for Russia to get around sanctions.

Apple did not respond to requests for comment. The tech company posted revenue of $81.8 billion in the third quarter of 2023, down 1 percent year on year.

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