Argentines Face Another Year Without Apple's iPhone

Date : 02/17/2012 @ 6:15PM
Source : Dow Jones News
Stock : Research in Motion Ltd. (RIMM)
Quote : 13.025  0.0 (0.00%) @ 2:05AM

Argentines Face Another Year Without Apple's iPhone

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Argentines face another year of scrounging for hard-to-get iPhones as the government continues to block imports of the world's most popular smartphone.

The government doesn't formally ban iPhones, but it has made it clear to mobile phone makers that they can't sell their products here unless they produce them in Argentina.

While companies such as Research In Motion Ltd. (RIMM) have partnered with local manufacturers to assemble phones here, it wouldn't make sense for Apple to do so, a top telecommunications executive said Friday.

Apple would be hard-pressed to justify investing in local production given its global distribution chain and the limited size of Argentina's market, Telecom Argentina SA (TEO) Chief Executive Franco Bertone said.

"To get an iPhone in Argentina you have to buy it on your first trip to Miami," he said at a press conference.

That's exactly what many Argentines do who when they travel to buy iPhones and other goods to get around import restrictions. Well-heeled Argentines, and even some government officials, can be spotted sporting iPhones.

A thriving black market in iPhones also exists for those who can't afford to visit Miami or a neighboring country.

An Apple spokeswoman did not return requests to comment for this article. Officials at the Commerce Secretariat, which vets imports, couldn't be reached for comment.

The South American country should be a hot market for iPhones. It boasts one of the highest rates of mobile phone ownership in the world thanks to Argentines' love affair with technological gadgets. In 2010, Argentina had about 142 mobile phones for every 100 residents, according to the International Telecommunications Union.

Apple sold around 3,000 iPhones in Argentina last year before the government started blocking phone imports in March, said Enrique Carrier, a Buenos Aires-based telecommunications analyst. It sold 30,000 in 2010, about double what it sold the previous year, he said.

Apple sold about 87 million iPhones worldwide in 2011, according to its latest quarterly report.

Carrier is not optimistic about Apple's chances of selling the iPhone in Argentina anytime soon.

"I think we're going to be an iPhone-less country," he said. "As long as they don't produce them here, the phones aren't going be allowed in."

The ban on iPhone imports is part of a broader import substitution system that encourages the replacement of imported products with locally made goods.

Argentine President Cristina Kirchner advocates the system to create and protect local jobs, as well as trim the country's rapidly growing import bill.

Kirchner's import substitution policies have led to periodic import bans on French cheese, Apple computers, BMW cars, Barbie dolls and even whiskey. Last year, the government delayed import of 1 million books at customs to coerce publishers to print them locally.

But Carrier said the term, import substitution, isn't quite accurate.

"They're not really substituting anything," he said. "What they're really doing is creating local jobs for people who assemble parts that are 80% to 90% imported."

-By Taos Turner, Dow Jones Newswires; 5411-4103-6728; taos.turner@dowjones.com



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