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Apple (AAPL) to Review Policy After Mapping Crimea in Russia

Zacks Equity Research
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Apple AAPL is examining how it handles disputed geographical borders in its Maps app after facing backlash from Ukraine for placing the Crimean peninsula in Russia in some versions, per a Bloomberg report.

As of Nov 27, the Black Sea peninsula and its largest cities of Sevastopol and Simferopol were being displayed as Russian territory on Apple's apps when used in Russia.

When viewed in the United States, Crimea is listed as undefined territory on Apple’s Maps App and no home country is given for the peninsula. However, when viewed on the Maps App in Russia, the region is listed as Republic of Crimea, Russia.

Notably, Russia occupied and annexed the peninsula in 2014. However, The European Union and the United States do not recognize Crimea as part of Russia and have imposed sanctions against the peninsula and individuals they believe violate Ukraine’s territorial integrity.

Nevertheless, Apple stated that it reviews international law as well as relevant U.S. and other domestic laws before labelling on Maps Apps and makes changes if required by law.

Notably, Alphabet’s GOOGL Google also does not identify Crimea as belonging to either Russia or Ukraine on its maps. However, when used in Russia, Google Maps depicts Crimean locations in Russian language and shows a line along the de facto border with Ukraine.

Apple Inc. Price and Consensus
Apple Inc. Price and Consensus

Growing Legal Woes in Russia & China

Apple is the latest U.S. corporation to land at the center of legal tensions, globally, including Russia and China, two of its largest iPhone selling markets.

Per a Statcounter report, Apple had 15.8% market share, second to Samsung’s 22% among other mobile vendors in the Russian Federation from Oct 2018 to Oct 2019.

Recently, Russia’s Federal Antimonopoly Service started investigating Apple for monopolistic practices after Kaspersky approached it.

Additionally, Roskomnadzor, the Russian government agency that oversees media and telecommunications had also successfully compelled Apple to store user data on servers located in Russia.

Under Russian counterterrorism laws, Apple could be compelled to decrypt and hand over user data to security services on request, per a Foreign Policy report earlier this year.

Moreover, in November, Russia passed a law that requires phones and computers to be sold with Russian software pre-installed after June next year, per a BBC Report. This threatens Apple’s position in the Russian smartphone market since it does not sell phones with third-party software.

Moreover, Apple removed HKMapLive App, a tool for pro-democracy protesters in Hong Kong and Quartz news app in October from its store, following criticism from the media in China.

Apple CEO Tim Cook defended his company after Apple agreed to China’s demands. The app allowed users in Hong Kong to see and track the location of police throughout the territory.

Notably, Google also pulled down from its Google Play store a mobile game that let players act as a protester in Hong Kong, per a Wall Street Journal report.

Further, Apple recently removed the Taiwan flag emoji from iOS keyboards in Hong Kong and Macau. The flag also does not appear on Apple devices in mainland China.

Apple’s recent decisions to abide by China’s strict policies led to fierce backlash from U.S. lawmakers, who have accused the company of prioritizing profits over human rights. Notably, China is Apple’s third-largest market, having accounted for 17.4% of total sales in fourth-quarter fiscal 2019.

Notably, Apple along with Alphabet is also facing investigation by the U.S. Department of Justice (DOJ).

Zacks Rank & Stocks to Consider

Apple currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are Cirrus Logic, Inc. CRUS and CommVault Systems, Inc. CVLT, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rates for Cirrus and CommVault are currently pegged at 15% and 10%, respectively.

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Click to get this free report Alphabet Inc. (GOOGL) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report CommVault Systems, Inc. (CVLT) : Free Stock Analysis Report Cirrus Logic, Inc. (CRUS) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research