Young Journalists Club | Latest news of Iran and world

News ID: 5403
Iran » Iran
Publish Date: 6:32 - 30 October 2014
The Company Considers Joining Other Western Firms as Sanctions Ease.


Apple Inc. is in contact with Iranian distributors about possibly entering the country should Western sanctions ease sufficiently, people familiar with the matter said.

Senior Apple executives have met potential Iranian distributors at Apple’s regional headquarters on London’s Hanover Street, people familiar with the matter said.

The Cupertino, Calif., company explored having Iranian partners sell Apple products at so-called premium resellers, some of the people said. Instead of company-operated Apple stores, such outlets would be midsize franchisees that sell Apple products only, a model the company has used in Europe and Asia, the people said.

A move into Iran for any Western company is still fraught with obstacles. Yet Apple’s conversations come amid a flurry of similar exploratory contacts between Western companies and Iranian businesspeople about how to set up shop in Iran, should a recent diplomatic thaw lead to a permanent easing of economic sanctions.

Tehran, eager to end several years of economic isolation because of its nuclear program, has been on a charm offensive with Western businesses, —eager to lure them back or persuade them to do business for the first time. European companies were the most active in early discussions—including, in some instances, participating in trade missions to Tehran, while U.S. companies mostly held back.

Some restrictions, such as bans on exporting spare parts for aircraft and cars to Iran, were lifted in January after Tehran reached an interim nuclear deal with world powers. Most sanctions against Iranian financial institutions remain in place, however, making it nearly impossible to transfer payments into or out of Iran.

Apple would be allowed to export its iPhone to Iran because of a U.S. decision last year to lift rules that had barred the sale of consumer communications technologies in Iran.

Other big Western businesses are starting to put their toes in the water, as well.

Boeing Co. last week said it sold aircraft manuals and navigation charts to Iran Air in the third quarter, its first such sales to Iran since 1979. Dell Inc. and General Electric Co. have also been in touch with potential Iranian distributors to sell personal computers and power-generation equipment, respectively, if sanctions are lifted, according to people familiar with the contacts.

Dell said by email that it follows U.S. embargo and sanctions rules and "will consider opportunities if/when they become available” but doesn’t comment on potential partners. GE said has it has a "long-standing policy not to do business in Iran unless related to humanitarian activities.”

French auto maker Renault SA has sought ways to execute payments after it was allowed to resume sending spare parts to Iran. And European oil companies have met Iranian officials to discuss how to resume operations.

U.S. officials have warned executives not to rush in hastily, however, and most companies aren’t likely to sign even preliminary deals until permanent sanctions relief is in place.

For Apple, Iran’s 77 million people offer a particularly attractive new market. Iran’s population is relatively young, with—42% of its people under age 25. Iran also boasts a relative large middle class. And despite decades of animosity between Tehran and the West, many well-off Iranians still embrace Western brands and trends.

Several obstacles remain to doing business in Iran. For one, any Western company would have to navigate the banking restrictions.

Apple also faces some particular challenges. The company would find it difficult to choose partners among mobile-service providers—if it decides to go that route—because of heavy state involvement with the sector.

A spokesman for the Iranian mission to the United Nations in New York said he couldn’t immediately comment.

WSJ
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