Argentina Is Hotspot for Black Market iPhones

There are serious trafficking problems in Argentina and this is not about drugs, but smartphones.

In Argentina’s national capital of Buenos Aires, there are numerous stores that have Apple images, signs and even photos of Steve Jobs the late founder of the company.

When entering any of the unaffiliated stores you can see walls painted in white covered with accessories for iPhones. However, to buy an iPhone, the customer has to ask in a discreet manner.

The smartphones made by Apple are still not authorized to be sold in Argentina. During 2009, under the President Cristina Fernandez, the government passed legislation that promoted local industry preventing a flow of capital out of the country.

Companies selling electronics were required to make them in the region of Tierra del Fuego to have the right to sell their products in Argentina. While LG and Samsung complied with the measure, Apple closed its doors and left.

The Fernandez administration also restricted the exchange of dollars and pesos and implemented an import tax of 50% on for electronics and other goods essentially setup to block the iPhones from entering Argentina.

However, under Mauricio Macri the new president, the government lifted restrictions on exchanging currency, but the high tax on imports has remained.

An iPhone 6S Plus with 64GB that has a cost of $950 in the U.S. would have an import tax of 50% and a minimum of $100 for shipping which would make the phone cost $1575.

It is actually less money to fly to Miami from Argentina and purchase the iPhone in the U.S. than buy on in Argentina.

However, the people of Argentina do not always wait for policy changes and instead found their way of obtaining the smartphones. Many take vacations to different countries such as the U.S. to purchase their phone.

Those not able to travel can find a large supply of the iPhones that were smuggled into Argentina. Over 12 million smartphones, the majority produced domestically, were purchased last year in Argentina.

Nearly 1.8 million were purchased on the black market, said one local research group. The resellers of the Apple smartphones either pay people off to have them smuggled in through Colombia or Chile or have connections in customs. In Colombia and Chile, an Apple iPhone is similar in cost to those sold in the U.S.

The biggest place they are sold is through Mercado Libre, the Latin America version of eBay, where resellers buy them and add their own price tag, which still is less than importing them.

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