Will Samsung stop selling in Russia?

Visitors are seen at Samsung Electronics' Galaxy Studio in Moscow, in this Aug. 10, 2017 photo. Courtesy of Samsung Electronics

By Baek Byung-yeul

Samsung Electronics is facing mounting pressure to take part in global companies' efforts to stop selling products in Russia as part of the international business community's movement to protest Moscow's invasion of Ukraine, according to industry analysts Friday.

At a time when global firms such as Apple, Intel, Nike and BMW have decided to take a stand against Russia by withdrawing the shipment or manufacturing of their products there, Ben Wood, a chief analyst at market tracking firm CCS Insight said Apple's boycott could consequently put pressure on rivals, especially Samsung.

"The move 'absolutely' puts pressure on rival firms like Samsung to follow," the analyst told CNBC, March 3, upon hearing Apple's announcement on March 1 that is will stop sale of its products in Russia. Anshel Sag, a principal analyst from Moor Insights and Strategy, also told the U.S. media that Apple's move "could force others to follow suit."

The industry view is that it is unreasonable to compare Samsung ― which ranks first in the smartphone market, with a 33.2-percent share in Russia in 2021, according to data by Counterpoint Research ― with Apple, which accounts for about 15 percent.

Samsung, having recently released its latest Galaxy S22 premium smartphone, operates TV manufacturing lines in Russia. The company has held the largest share in the country's smartphone market since 2007.

"Their (Apple) business is so big that it's very resilient," Wood said, adding, "to lose that revenue is not going to have a catastrophic impact on the business."

Regarding the issue, a Samsung Electronics spokesman said that there is no official company position on the matter.

However, a local IT industry official said that it will be difficult for Samsung to take action in advance of government policy decisions against Russia, although the pressure on Samsung to stop selling its products in Russia is expected to grow, due to strong anti-Russia sentiment.

He added that U.S. companies like Apple were able to participate actively in the movement to stop selling in Russia because their government aggressively sanctioned Moscow's invasion of Ukraine.

"The current economic sanctions against Russia are led by the U.S. The Korean government is participating in these sanctions as part of the international community. In this regard, there is a difference between Korean and American companies. From the perspective of Korean companies, it is not right for them to push ahead if their government does not take a lead role in the sanctions," the industry official said.

"Apple's suspension of sales was possible as its business in Russia is not that large and the U.S. government is active in the sanctions movement. The position of Korean companies is that it is right to act in cooperation with their government. So these companies are closely monitoring this situation," he added.

The Korean government announced late last month that it would join the international community's sanctions on finance and exports to Russia, denouncing the armed invasion.

Whether Samsung decides to boycott Russia or not, market tracker TredForce said the Russia-Ukraine war could have negative impact on the smartphone market in the region. "The smartphone industry will be noticeably affected by the ongoing war. Take the ranking of smartphone brands by market share in Russia and Ukraine last year, for instance; the top three brands sold included Samsung, Xiaomi and Apple, which had combined annual sales of about 45 million units for 2021."

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