TEHRAN, Iran (news agencies) — With flashy celebrity ads and promises of deep discounts, a shop in Iran’s capital had offered consumers in the Islamic Republic one of the hottest products in the country — an iPhone that came out in 2021.
But instead of getting their hands on the handsets, police and prosecutors in Iran allege customers found themselves ensnared by a business owner running a multimillion-dollar Ponzi scheme.
Yet the controversy surrounding the Kourosh, or “Son of the Sun,” Company extends far beyond just the alleged scheme.
It’s a sign of the economic woes plaguing Iran after decades of Western sanctions, now accelerating as Tehran rapidly advances its nuclear program, helps arm Russia in Moscow’s war on Ukraine, steps up support for proxy militias in the Middle East and violently cracks down on dissent ahead of parliamentary elections on Friday.
When the government last year banned Apple’s iPhone 14 and 15 from the Islamic Republic, the ban spurred a parallel economy for the older handsets, jacking up prices for the devices as many sought to put their depreciating Iranian rials into any physical commodity.
And even though Supreme Leader Ayatollah Ali Khamenei has denounced American luxury goods amid years of tensions with the West, consumers still want the phones and the prestige associated with them.
“There is a lot of demand,” said Aram, a mobile phone shop keeper in Tehran who gave only her first name for fear of retaliation. Her customers keep asking for the “latest couple of iPhone models” — the ones that are banned.
“If they could allow legal imports … it would be much better,” she said.
In shops across Iran, iPhone 13s range in price starting from $330 for refurbished models to $1,020 for those still in the box — shiny and new, though still not quite the coveted iPhone 15 now available elsewhere in the world.
Even if you bring an iPhone 14 or 15 model into the country, it will stop working on the Iran’s state-controlled mobile phone networks after one month, the time span for tourists who visit the county.
Imports of iPhones have long been a contentious point — government statistics suggest that about a third of Iran’s entire $4.4 billion mobile phone import market consisted of iPhones before the ban.
The private companies that import mobile phones have access to government-set exchange rates far lower than the rate of 580,000 rials to $1 in exchange offices, making the business that much more lucrative.
At the time of Iran’s 2015 nuclear deal with world powers, the exchange rate was 32,000 rials for $1.
Khamenei pointedly criticized the iPhone imports in remarks to government ministers in August 2020.
“Excessive imports are something dangerous,” Khamenei said at the time, according to a transcript on his official website. “Sometimes this import is a luxury product, meaning there is no need for it. I’ve heard about half a billion dollars were spent to import one type of American luxury cellphone.”
But the demand is still there and iPhones remain a status symbol for many young Iranians.
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