Impact of US Sanctions and Domestic Fees on Iran's Electronics Market

Tehran, Iran – When the latest iPhone 18 lineup was released by Apple in the United States on September 18, it only took a couple of days for the new models to go on sale in downtown Tehran. That is despite Apple not having a physical presence in Iran due to years of international sanctions, and the ongoing months-long US naval blockade of Iran’s southern ports, through which the bulk of the country’s imports previously entered. “These things can’t stop a mobile phone seller,” a phone and accessories trader in Tehran’s Charsou Mall, a major electronics hub, told Al Jazeera, asking to remain anonymous for security reasons. But he explained that the process of bringing in phones has become much more complicated, time-consuming and costly, due to both external pressures and domestic conditions imposed by the Iranian government. Many electronics manufactured internationally are imported into Iran via Dubai in the United Arab Emirates, but the nearly eight-month-long war with the US and Israel has disrupted trade through the Strait of Hormuz. Iran has also repeatedly attacked the UAE throughout the conflict, and the UAE also announced a halt to trade, commercial exchanges and financial transactions with Iran on August 19. Some Iranian traders then pivoted to using passengers coming in from Oman to bring in phones and other items. But after US sanctions on all Iranian airlines – and anyone who provides services for them – came into effect in September, few flights are landing in the country. “Most of the phones are now smuggled into the country. Many go to Sulaimaniyah and then come in by land,” the trader said, referencing the northeastern city in the Kurdish region of northern Iraq, which borders western Iran. A similar story has also been true for many other electronics currently found in the Iranian market, including laptops, graphics and processing units, PlayStation devices and even Starlink terminals. This week in Tehran, a MacBook Air 15-inch M4 sold for the rial equivalent of more than $1,450, about 6 percent higher than an average retailer in the UAE. A one-terabyte PlayStation 5 Slim disc-edition console was going for about $730, or 11 percent more expensive than some retailers in the US. Mobile phone service on imported devices only works for 30 days if a registration fee to the Iranian government is not paid. The fee was introduced nearly 10 years ago, ostensibly aimed at fighting smuggling and corruption. The amount varies depending on the value of the phone, with the government charging import duties of up to 6 percent for phones worth below 600 euros ($673), up to 15 percent for phones between 600 and 900 euros ($673 and $1,010), and up to 30 percent for phones with a value above 900 euros. After adding other levies and “warranties” from domestic companies, extra charges for some phones can amount to more than half of the total price paid. But even a registered phone cannot be used to freely access the internet, as the government imposes severe internet filtering and shutdowns, while global payment methods are off-limits to Iranians and international firms refuse many services to Iranian nationals because of US sanctions. According to the state-linked Tasnim news site, about $1.6bn worth of mobile phones were imported commercially during the previous Iranian year ending in March 2026, up to 20 percent of which were phones priced at more than $600. Phones worth $470m were brought in by aeroplane passengers, most of them higher-spec phones. There are no clear figures for smuggled phones. In mid-August, customs chief Foroud Asgari told state media that approximately one million phones had been imported during the first five months of the current Iranian year, versus 3.16 million in the corresponding period of a year earlier. He said the import value of the phones had fallen by approximately 70 percent. The government can also decide to stop the registration of phones whenever it deems necessary. That was the case between 2023 and 2024 for newer iPhone models, which authorities said could not be registered under any circumstance because they were made by an American company and were gobbling up precious foreign currency reserves for imports. Authorities did not take issue with similarly-priced high-end models. Skyrocketing government charges and local restrictions are making it harder for Iranian customers to afford new phones at a time when the monthly minimum wage and basic government subsidies for an average married worker amount to the equivalent of just $83 in Iran. The rial, the country’s national currency, has continued on its downward spiral. It changed hands for about 2.64 million per US dollar in Tehran on Monday, slightly improved from an all-time low reached earlier this month. Prices have been surging across the board, especially for food and other essentials, as domestic mismanagement, war damage, sanctions and blockade squeeze the Iranian economy and make most of the country’s 90-million population poorer. Afsaneh, a 27-year-old teacher from Tehran, said she has been thinking about replacing her iPhone 13 with last year’s 17 model, but balks when she sees the prices. “The only way to get it is to sell my current phone, use my small savings and also borrow from my parents,” she told Al Jazeera. She pointed out that many among her peers and acquaintances are also forced to keep old devices alive by repairing them or replacing parts, if possible, since they cannot afford to upgrade. “A lot of people are one failure of a major electronic device away from getting into serious debt,” she said.