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NY B85915




June 23, 1997

CLA-2-85:RR:NC:MM:109 B85915

CATEGORY: CLASSIFICATION

TARIFF NO.: 8517.80.2000

Mr. Steven W. Baker
Law Offices of Steven W. Baker and Associates One Sutter Street, Suite 1004
San Francisco, CA 94104-4919

RE: The tariff classification of the iPhone from Thailand

Dear Mr. Baker:

In your letter dated May 19, 1997, you requested a tariff classification ruling on behalf of your client, CIDCO, Incorporated, Morgan Hill, California.

The merchandise is described as the iPhone. Your request included a written description of the device and literature. The literature indicates that this device combines "The World's Best Telephone and the World's Easiest Access to Internet Services." The iPhone resembles a desk top telephone. The top of the iPhone has a telephone handset, a 7.4 inch diagonal touch screen display, a telephone keypad with hold, mute, speaker, and volume buttons, and a four way directional button. It also has a pull out QWERTY keyboard, a 14.4k modem for data communication, and a IC chip set. The iPhone has advanced telecommunications functions: speaker phone, caller ID, caller ID with call waiting, analog display services interface (ADSI), E-mail, integrated E-mail and caller ID directory, and Internet access. It also has data processing functions: it can compose text off line or on line, store text, it can be used as a network access terminal, and it contains Web browser software. Future upgrades are expected to include personal information management (PIM), calendar, and calculator when connected to a host providing the application software.

HQ 086553, and HQ 953453 address similar devices that incorporate both telecommunications functions, and data processing functions. In these rulings we classified similar composite machines as telegraphic apparatus under subheading 8517.82.00, HTS. The degree of physical and functional integration of these devices made it difficult to isolate one of the functions and identify it as the principal function. They were classified pursuant to GRI 3(c), HTS, under the last subheading among the subheadings which equally merited consideration.

This device is also a composite machine pursuant to Note 3, Section XVI, Harmonized Tariff Schedule of the United States (HTS). It performs at least two alternative functions: data processing and telecommunications (both voice and data communications), and it will be marketed based on both functions. However, it is difficult to separate the data processing functions from the telecommunications functions in this device, since both are supported in many instances by common hardware, and the functions themselves are frequently interrelated. Neither the data processing nor the telecommunications function can be determined to be the principal function of this device. Pursuant to GRI 3(c) this device "...shall be classified under the heading which occurs last in numerical order among those which equally merit consideration." Therefore, the applicable heading for the iPhone is 8517, HTS.

At the subheading level this device performs the alternative functions of voice communications (telephonic), and data communications (telegraphic). Again, because of the design of this device, neither function can be determined to be the principal function. Therefore, pursuant to GRI 6 and GRI 3(c), the iPhone is classified as telegraphic apparatus, the subheading which occurs last in numerical order.

The applicable subheading for the iPhone will be 8517.80.2000, Harmonized Tariff Schedule of the United States (HTS), which provides for "[o]ther apparatus: [t]elegraphic." The rate of duty will be 4.7 %.

Articles classifiable under subheading 8517.80.2000, HTS, which are products of Thailand are entitled to duty free treatment under the Generalized System of Preferences (GSP) upon compliance with all applicable regulations, if the GSP is renewed.

This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).

A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Eileen S. Kaplan at 212-466-5673.

Sincerely,

Robert B. Swierupski
Chief, Metals & Machinery Branch

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