How Apple, Big Tech benefit from taking on Russia

Silicon Valley’s tech giants are joining the rest of the business world in pulling their products and services from Russia. Companies like Apple (AAPL) have cut ties to the Russian market entirely to protest the invasion of Ukraine, while firms like YouTube (GOOG, GOOGL), Meta (FB), and Microsoft (MSFT) are limiting the availability of Russian propaganda networks like RT and Sputnik in Europe.

And while Big Tech’s moves put at least some pressure on Russian President Vladimir Putin and provide assistance to Ukrainian citizens, they can also be a boon for the companies’ bottom lines. And for companies awash in controversy, taking action against Russia can improve their standing among consumers.

“We want to think that this is altruistic and companies taking a stand, but sometimes it’s also value washing,” Forrester senior analyst Alla Valente told Yahoo Finance. “In other words, if a brand has had some bad media or publicity they could be doing this to try and repair their brand reputation.”

More good than harm

Among major tech brands, Apple is taking the strongest stance against Russia. The company has stopped all product sales in the country, limited services like Apple Pay, removed the RT and Sputnik apps from the App Store everywhere except inside Russia, and disabled traffic and live incidents in Apple Maps to prevent Russia from seeing where Ukrainian citizens may be gathering.

MOSCOW, RUSSIA - MARCH 2, 2022: A re: Store shop at the GUM department store.  As of March 2, all re: Store shops in Moscow have been closed as Apple halts all product sales in Russia.  Artyom Geodakyan / TASS (Photo by Artyom Geodakyan & # 92; TASS via Getty Images)

MOSCOW, RUSSIA – MARCH 2, 2022: A re: Store shop at the GUM department store. As of March 2, all re: Store shops in Moscow have been closed as Apple halts all product sales in Russia. Artyom Geodakyan / TASS (Photo by Artyom Geodakyan \ TASS via Getty Images)

Apple does not have any physical stores in Russia, meaning its products are sold through third-party retailers. And according to Wedbush analyst Dan Ives, cutting Russia off from hardware sales won’t put much of a dent in Apple’s bottom line.

“Russia overall is breadcrumbs in terms of its financial impact to US tech giants,” Ives told Yahoo Finance. “If FAANG names pulled the plug on doing business in Russia it’s maximum 1% -2% overall revenue exposure.”

Apple has long made human rights one of the cornerstones of its appeal, even if it’s too its detriment at times. It famously pushed back against the Department of Justice when investigators demanded Apple create a backdoor for iOS to gain access to an iPhone used by one of the killers in the 2015 San Bernardino terror attack.

Apple’s protested the demand, saying building the backdoor would create a vulnerability in every iPhone on Earth that hackers could quickly find and exploit.

“They are a brand that has drawn a line in the sand about what they stand for and what they do not,” Valente said. “And when you’re driven by those types of delineations, it makes it clearer to see the path that you need to go.”

Of course, Apple, along with other tech giants, does not have a perfect track record. The company famously sells and builds its products in China, which has been accused of human rights abuses including locking Uyghurs up in concentration camps in Xinjiang.

In general, brands that stand with Ukraine should benefit from the positive attention they receive, and could draw new customers who choose which companies they do business with based on their morals.

Big Tech’s moves will keep employees, attract talent

In addition to keeping customers happy, tech companies ‘actions against Russia can also boost their employees’ morale and serve as a strong recruiting tool for future employees.

Employee activism is a major force in Silicon Valley, driving businesses like Google to distance themselves from certain military contracts. Firms certainly recognize this and want to ensure they keep their employees happy by supporting Ukraine.

“Think about if you had senior people or important people or certain talent that said, ‘You know, we as employees no longer aligned with this brand that we’re working for, and we’re going to leave.’ I mean, that could be a huge issue for tech companies, ā€¯Valente said.

It’s not just about current employees though. Tech companies need to ensure that they are on the right side of the conflict if they want to continue attracting top talent, especially at a time when there are more job openings than available workers.

Tech companies are almost assuredly taking a stand against Russia, because their executives feel it’s the right thing to do in the face of an unprovoked invasion. That said, they also likely realize that doing so has tangible benefits for themselves.

It will be more interesting, however, to see which companies continue to hold their positions if the war drags on for months or years, and whether they’ll feel the same then as they do now.

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Got a tip? Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.

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