Argentina blocks iPhone sales in bid to strengthen economy

The Argentinean government has temporarily blocked sales of certain electronics including Apple's iPhone and RIM's BlackBerry. Such measures were attempted in order to stabilize the country's ailing economy, to slow rising inflation and correct the disparity between the pesos and U.S. dollar, while suggesting that companies must build plants in the country to resume sales.

In order to continue smartphone sales in Argentina, Apple must build a plant or partner with a local company to manufacture the iPhone. RIM is reportedly looking to partner with an existing plant so that it can continue sales in the region. Other handset makers like Motorola, Nokia and Samsung have already moved or built plants in Argentina's Tierra del Fuego free zone after the government passed the Internal Revenue Law of 2009, which added a 20.48 percent tax to the existing 21 percent VAT for certain imported electronic devices.

According to Argentinean site Fortunaweb, iPhone and BlackBerry sales comprised 60 percent of the total market in October. And to strengthen the Argentinean economy, the government made decision to support local manufactures, banning some electronics manufactures from sales in this country. The Economist reported in December article that "a slowing year-to-year GDP blamed on decreased demand for agricultural commodities and huge government subsidies have caused the country to enact tighter controls on capital flight".