Sci & Tech

Microsoft Store Opens in Tehran

Microsoft Store Opens in TehranMicrosoft Store Opens in Tehran

A new store proclaiming itself the official flagship Microsoft representative has opened in Tehran's busy mobile phone bazaar district on Hafez Street.

The highly polished showcase outlet is officially promoting sales of Microsoft products, including Lumia mobile phones, previously Nokia Lumia, Microsoft Surface Tablets and Xbox video gaming consoles.

According to Tasnim News Agency on Thursday, “The American company of Microsoft stole a lead to open a mobile phone sales store in Iran,” however that is not the entire story.

“This five-unit store has been opened by Pars Samtel, the exclusive agent of Microsoft mobile phones—Microsoft has yet to confirm this arrangement—at Iran Mobile Marketplace on Hafez Avenue in Tehran, with the company’s banner ad clarifying that the store is the first in Iran,” it said.

The report was then picked up on Reddit–an Internet chat forum–and also Iran's government-backed English-language channel Press TV. This in turn was picked up by that repeated both their sources. But does Pars Samtel really have a contract with the Redmond giant to sell new phones and other electronics? Unfortunately, Pars Samtel was closed as we went to print and were unavailable to confirm their partnership.

Financial Tribune also contacted Microsoft Customers Services Department as well as their PR agency, however only one returned a response. Microsoft's PR Department said they were closed and will respond in due course. Customer services first responder, Icy, responded by saying, "I'm sorry, we don't know the article," referring to the Windows Central report.  

Financial Tribune went to visit the store check the veracity of Tasnim's report. The representative in the store confirmed that they are a "distributor" and are licensed to sell the phones "with warranty."

The flagship store was previously the site of Nokia's Tehran flagship store, which lends credence to Pars Samtel's claim that they are the (un)official representative of Microsoft in Tehran after other companies in Tehran.

  Emerging Smartphone Market

The opening of the large promotional store–directly across from Samsung's flagship store–confirms Microsoft may be focusing on the emerging markets for the majority of their growth over the next five years.

This is supported by comments on Reddit which suggest Tehran may have received its Microsoft store before New York City and the entire United Kingdom. If true, it supports previous statements by the company's CEO, Satya Nadella, who claimed that the future of mobile market is the emerging market whose take-up of smartphones far exceeds that of the developed economies.

The share of smartphones in Iran, with mobile phone penetration of over 120%, according to some sources, including the local operators themselves, remains small at just under 40%. Some local industry analysts believe the growth of this is likely to come from first-time buyers upgrading from "feature phones."

  Is the Microsoft Store Real?

Coca Cola sells in Iran, as does Pepsi, both of which are American companies, both of which use foreign subsidiaries to sell to Iranian customers to avoid being caught in the endless red tape, which is OFAC sanctions.

The American company reportedly uses an Irish subsidiary to work with Iran. In the case of electronics, this becomes even far trickier as US President Barack Obama lifted sanctions on the sale of electronics and cellphones by American companies to Iranian individuals.

Bloomberg wrote then: "The policy shift was announced today by the US State and Treasury departments, which administer the sanctions imposed on such consumer electronics since 1992. "The [US] Treasury Department is issuing what’s known as a general license, permitting sales to non-government consumers involving US electronic hardware."

The products covered by the general license include mobile phones, satellite phones and broadband hardware, modems, network interface cards, routers, WiFi access points, laptop computers, tablets, disk drives, data storage devices, anti-virus and anti-tracking software, online store applications and fee-based personal communications tools, including voice, text, video, voice-over-IP telephony and video chat. Microsoft products, including their phones and tablets, come under this exemption. However, the change in the sanctions regime back then did not allow the company to officially set up shop in Iran. Hence, Pars Samtel and others.

  Who's Who

Now that the flagship store has opened at Iran Mobile, the store also lends further claims to other companies in Tehran and their relationship with the American computing giant. In December last year, Sharq newspaper correspondent Sobhan Hassanvand reported through his social media account that Microsoft Services division had opened on Tehran's Bucharest Avenue, with the accompanying sign of Microsoft covering four levels of the building.

The shock appearance of the sign on the large building in Tehran's corporate district occurred after Microsoft bought Nokia’s mobile division in 2014. At the time, Microsoft was left with many things, including Nokia’s former dominant role in Iran’s mobile phone market.

A report by this newspaper at the time suggested that the representative company for Nokia prior to their buyout also inherited their new partners' contract.

The company formally called Irnokia and now Iratel, established in Iran for well over a decade ago, held the contract on Nokia’s aftercare service, but not sales.

Whether Pars Samtel won the new partnership contract from Iratel, or they are now sharing it remains unknown, but Iratel did respond to an earlier request from the newspaper via Twitter that they "do represent Microsoft."

Whatever the claims of "real or fake", the one group which wins in all of this is the Iranian consumer who can now say it has another international electronics maker offering items in their market with warranty, something that has been absent from the sales of Microsoft/Nokia phones since it was forced to leave the market in 2010.