Consumer Products

Iran May Ban iPhone

In what may be another litmus test for Apple Inc. (NASDAQ: AAPL) and its commitment to its users’ privacy, the government of Iran has threatened to ban the sale of the company’s iPhone unless Apple complies with new anti-smuggling laws.

Apple and, presumably, other manufacturers are required by law to register an official representative in order to sell products in the Islamic Republic. The company has not yet done so, and according to a report at AppleInsider, must comply “within the next few days” or all iPhones will be “collected from the market.”

Under the new laws, all mobile phones must be sold by a legitimate (i.e., registered) business and all phones must be added to a countrywide registry before they can be used. The government apparently will not attempt to collect phones already in consumers’ hands.

Lacking an authorized representative means that sales are considered to be smuggling, and while there is no indication of what the penalties might be, it’s probably safe to assume that they could be severe.

Apple does not have a network of authorized resellers in Iran, but iPhones reportedly sold well in the black market until sanctions against the country were eased in 2013. iPhones are available from “unauthorized resellers,” but it is not clear where the supply of devices comes from.

Iran’s central mobile phone registry gives government the ability not only to track legal sales of mobile phones but an easy way to monitor phone usage and creates a tempting target for data thieves.

And while Iran’s registry does not raise the same privacy issues as the U.S. government’s attempts to get Apple to crack the San Bernardino killer’s phone, it does not require a great leap to imagine ways in which the registry could be used to invade users’ privacy.

Will Apple name an authorized representative or will it give up sales in Iran? Right now the company has no authorized resellers in the country, so, in reality, it gives up nothing by pulling out. Stay tuned.