by TEHRAN, Iran (AP) — With flashy celebrity ads and promises of deep discounts, a store in Iran’s capital offered one of the country’s hottest products to consumers in the Islamic Republic — an iPhone coming out in 2021.
But instead of getting their hands on the handsets, police and prosecutors in Iran allege that a business owner running a multi-million dollar Ponzi scheme tricked customers.
But the controversy surrounding the Kourosh Company, or “Son of the Sun,” doesn’t go much further than the alleged scheme.
It is a sign of the economic woes plaguing Iran after decades of Western sanctions, which are now accelerating as Tehran makes rapid progress on its nuclear program, helping Russia get its hands on it. in Moscow’s war on Ukraine, increasing support for proxy militias in the Middle East and violently suppressing dissent. ahead of parliamentary elections on Friday.
When the government banned Apple’s iPhone 14 and 15 from the Islamic Republic last year, the ban sparked a parallel economy for the older handsets, driving up prices for the devices and many calling for their disrespectful Iranian rules. put into any physical item.
And while Supreme Leader Ayatollah Ali Khamenei has denounced American luxury goods amid years of tension with the West, consumers still want the phones and the prestige that comes with them.
“There is a lot of demand,” said Aram, a mobile phone shopkeeper in Tehran, who gave only her first name for fear of retaliation.
“If they could allow legal imports … it would be so much better,” she said.
In stores across Iran, iPhone 13s prices range from $330 for refurbished models to $1,020 for those still in the box – shiny and new, though not yet the popular iPhone 15 now available in places another in the world.
Even if you bring an iPhone 14 or 15 model into the country, it will stop working on Iran’s state-controlled mobile phone networks after a month, the time period for tourists visiting the county.
Imports of iPhones have long been a point of contention – government statistics suggest iPhones accounted for about a third of Iran’s $4.4 billion total mobile phone import market before the ban.
The private companies that import mobile phones have access to exchange rates set by the government much lower than the rate of 580,000 rials to $1 in exchange offices, making the business much more profitable.
When Iran had the nuclear deal in 2015 with the world powers, the exchange rate was 32,000 regals for $1.
Khamenei pointedly criticized iPhone imports in comments to government ministers in August 2020.
“Excessive imports are a dangerous thing,” Khamenei said at the time, according to a transcript on his official website. “Sometimes this importation is a luxury product, which means there is no need for it. I heard that it cost about half a billion dollars to import one type of American luxury cell phone.”
But the demand is still there and iPhones are still a status symbol for many young Iranians.
“I prefer the iPhone to any other phone, at any price, because it can’t be compared to any other brand in terms of luxury,” said Ehsan Ehsani, a 23-year-old architecture student in Tehran.
Rules for importing iPhones into Iran have always been strict.
Only travelers could bring the phones in on their own, who would then register them at the country’s point of entry, declaring that the iPhone was for personal use. At customs, people would give their passport numbers and pay a fee of 22.5% of the price of the phone, as determined by the government or perhaps a sales receipt.
This gave rise to an outside business where iPhone traders would wait for passengers at the airport and pay them in exchange for their permission to use their passport numbers to register iPhones in their stock.
Navid Bahmani, a 26-year-old who works in an iPhone store in Tehran, said he would pay travelers up to $40 for their passport numbers at Tehran’s Imam Khomeini International Airport.
“The price depends on the travelers,” said Bahmani, “Some accept the first offer, some don’t.”
Apple, based in Cupertino, California, did not respond to a request for comment.
Iran’s economic problems also led to schemes like that of Kourosh, also the name of the Persian throne under Cyrus the Great.
Inflation has overtaken any interest rate offered by a bank, and depreciation has also reduced people’s savings. As a result, many try to buy a physical asset, whether it’s a house, jewelry or even a car to protect against loss.
That’s where the Kourosh Company came in.
The company offered iPhone 13s starting from the equivalent of $ 360 – if you were willing to pay first and wait for a few weeks before receiving the device. Iranian celebrities appeared in online advertisements for the firm, attracting even more attention.
Some customers got their iPhones first, adding to the frenzy surrounding the store. The reformist newspaper Shargh estimated that the company made $36 million in less than a year, although this has not been confirmed by officials.
Then the iPhones dried up.
Kourosh’s 27-year-old CEO and alleged ringleader of the scheme, Amirhossein Sharifian, suddenly left Iran in September – and is still on the run – with millions of dollars in payments, says Iranian authorities.
The Associated Press could not reach Sharifian for comment, although a company employee insisted in an online video posted two weeks ago that supply chain issues were causing the delay in iPhone deliveries.
The spokesman of the Iranian police Gen. Saeed Montazeralmehdi that investigators are still after Sharifian.
Despite the rumors, customers keep outside the store, including on a recent freezing day in Tehran.
“I paid for nine (iPhones),” said Moteza Zarei, 47, who runs a car repair shop. “I felt it was a good way to increase my investment. But I got none.”
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Associated Press journalists Amir Vahdat and Mehdi Fattahi in Tehran, Iran, contributed to this report.
