Warning Against Preordering Contraband Apple iPhone X

None of the importers with valid permits have so far started bringing iPhone X, says the ICT head of the Headquarters to Combat Smuggling of Goods and Foreign Exchange.

Hamidreza Dehqaninia cautioned against placing preorders with local dealers for the new Apple cell phone, ISNA reported.

According to market insiders, some dealers have started presales of Apple’s new flagship device iPhone X (known as iPhone 10). This is while the device went on sale on October 27 and will be shipped to the US today (November 3).

Dealers are charging customers a whopping 130 to 270 million rials ($3,250 to $6,750) for this handset offered in two colors, Silver and Space Gray and two capacity options 64GB and 256GB. However, the same two models are priced at $999 and $1,149 on Apple’s official website.

At the time of arrival in the local market, idevices are always priced significantly higher than in the international markets, but charging customers such outrageous amounts for visibly nonexistent goods is unprecedented.

Furthermore, there are reports that Apple is facing a shortage in production and may not be able to deliver all the presold devices for several months.

Head of Tehran Telecommunications Union Gholam Hossein Karimi has called on users to be patient and “wait till the phones are brought legally into the market.”

He says 20 Iranian businesses have been given import permits for the new Apple phones and are obliged to offer after sales services on the new devices.

 Mobile Registry Scheme

In a bid to curb smuggling of cell phones, the Telecom Ministry, Islamic Republic of Iran Customs Administration, and the Industries Ministry have recently introduced a scheme they call “Mobile Registry” according to which local operators are barred from offering services to contraband phones.

After more than a decade delay in implementing the scheme, its initial phase was launched on Oct. 20. Officials say that contraband iPhone Xs will be the first gadgets to be targeted through the scheme.

According to Telecoms Minister Mohammad Javad Azari Jahromi, “The mobile network is updated and a database encompassing all active handsets is being created.”

For creating the database, the handsets’ IMEI, or the International Mobile Equipment Identity, is used which is a unique number — like fingerprint for electronic devices — that helps identify the serial number of the mobile phone.

Since November 2015 all importers of mobile phones have been obliged to register the IMEI of their goods with the database.

The IMEI number is used to identify valid devices, therefore, can be used for locating a stolen or illegally imported phone from accessing Iran’s communications networks. Therefore, only smartphones and gadgets, which have entered the country through the official and legal channels, can be used.

According to Jahromi, to forestall harm to consumers, the IMEI of smuggled handsets that were sold before the launch of the registry scheme has been added to the database. Jahromi says, “Mobile Registry will not impact users who purchased their phones before the scheme was launched.”

He called on the people buying mobile phones to make certain that the device entered the country legally.

 Price Bubble

Since the official launch of the registration scheme, the local mobile phone market has seen a 20% jump in prices — which for Samsung and Apple flagships translates into an unjustified  8-million-rial ($200) increase.

Jahromi is of the opinion that so far nothing has changed for devices that entered the country before the launch of the scheme, and the prices should not have increased. “Jacking up prices on handsets with no legitimate reason is outright thievery,” he notes, but does not say how his ministry can or will stop this pattern of fleecing consumers.

He adds that it would be wiser for customers not to buy smartphones now and wait till the scheme rolls out completely and the prices come back to normal.

According to him, the import tariff for mobile phones is 5%. Some ten points lower than what dealers claim to be the “official tariff”. Perceived high import tariffs  are the normal excuse made by dealers for the raising prices.

However, Jahromi does not mention the fact that in addition to the import tariff, the government has slapped an extra 13% tax on smartphones.

 National Impact

Head of Iran Cell Phone Importers Association Mahmoud Saffar says, “Annually 12 to 15 million mobiles are sold in Iran with 95% of handsets entering the country illegally.”

The IRICA incurred $625 million in lost revenues in the last fiscal that ended in March due to the rampant smuggling of cell phones.

Dehqaninia of the ICT says, “Annual local demand for cell phones is between 10 million and 12 million. Hardly 1 to 1.2 million is legally imported and the remaining is smuggled.”

 Check Your Phone

IRICA has launched a website and SMS service that enable cell phone buyers to identify contraband phones. Smartphone buyers should check the IMEI number before they buy the handsets.

The code is usually printed inside the battery compartment of the cell phone, but can also be displayed on the screen on most phones by entering *#06# on the dial pad, or alongside other system information in the settings menu on the operating systems of smartphones.

By entering the IMEI on the website https://epl.irica.ir/ImeiInfoView?0, in less than a few seconds the code will be checked with the database and if registered, a message will be displayed: This handset has been legally imported and is registered.

In addition to the website, the agency has developed an SMS system through which customers can text the serial number to 30008887 and instantly receive a confirmation whether or not the device is contraband.

The local payment app Asan Pardakht in a new update has added a section through which users can access the database.

In a bid to help promote transparency, using IMEI and the website customers can also check their handsets’ country of origin, what price tag has been registered with IRICA and how much in tariffs and tax the importer has paid.

Financial Tribune randomly checked cell phones of different brands such as Apple, LG, Samsung and Google purchased in Iran. All were registered on the database.