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Why is Iran Threatening To Ban iPhones? Apple Inc. (AAPL)

Apple Inc. (NASDAQ:AAPL) iphone

Iran has warned Apple Inc. that the iPhones could be banned in the country if the company will not apply for an officially registration. This warning is part of Iran’s efforts to control the use of smuggled smartphones in the country, where currently more than 40 million Iranians are using smart phones, including millions of iPhone users. According to a local news agency, Iranian officials want iPhone manufacturer to either officially register in Iran or have its products banned, The Japan Times reported, citing a local news agency.

Apple Inc. (NASDAQ:AAPL) iphone

Ban in Iran

According to the report, Apple has few days to apply for a registration and avoid a ban in Iran.

“If Apple will not register an official representative in Iran within the next few days, all iPhones will be collected from the market,” the director of Iran’s anti-smuggling office as quoted as saying by Tasnim News Agency on Sunday.

Opening stores in Iran won’t be difficult for Apple. Tasnim news agency reported, citing a representative from the anti-smuggling office, that there is no legal limitation to the U.S. tech giant registering a store in Iran.

Iran is cracking down against smuggled mobile phones. An anti-smuggling project has been started under the supervision of the president’s office to ban smuggled mobile phones. The scheme, set to begin later this week, will require all mobile phones to be registered with Iran’s telecommunications user database, according to the reports.

Tehran is saying that the project to collect unregistered devices and ban iPhone has received the cooperation of mobile operators, customs and the union of mobile phone sellers.

But many IT activists are criticizing the decision to potentially ban iPhones. “Collecting this huge number of iPhones will not be easy,” the head of the Tehran IT union told Tasnim News. He also raised concerns over the potential hacking of the telecommunications database.

Apple Facing Problems in Asia

Apple Inc. has faced some setbacks in Asia over recent years. The U.S. tech giant has lost a trademark fight in China and been refused permission to open its own stores in India. The Indian government has also rejected the company’s plan for selling refurbished iPhones, saying that “We are not in favor of any company selling used phones in the country.”

Apple views India as a very important market, the world’s fastest growing large smartphone market where with sales expected to rise over 25% this year. Apple’s growth seems to be stalled in its two top markets, the U.S. and China. In India, the company has less than a 2% share in the smartphone market.

The majority of future growth for the company’s depends on its strong foothold in China. Early this year, billionaire investor Carl Icahn sold his entire stake in Apple on concerns about the company’s growth in China. Talking to CNBC’s Squawk Box, the activist investor said that he unloaded the company’s shares because he was worried about the company’s growth in China.

Apple has been facing problems in China, where its sales plunged 26% in its fiscal second quarter. Recently, Shenzhen-based Baili has sued Apple for infringing the patent right of its smartphone. After a court ruling, Beijing Intellectual Property Office ordered the U.S. tech giant to stop selling its iPhone 6 and iPhone 6 Plus in the country. The iPhone maker quickly made an appeal to a higher court, which allowed it to continue selling the iPhone 6 line until the court ruling.

Shares of Apple Inc. are down nearly 7% this year.

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