Best way to send it : Choose a company like UPS, and make sure it will be delivered by UPS Greece, and not by the the Hellenic Post, ELTA

Theoretically you should declare it as a gift, and your friend would not pay any taxes, up to a certain amount that represents the value of the gift...
There are random controls from the authorities and chances are that he will have to pay first to receive the package.

One year ago, i bought 4 Art Deco Lithographs from the USA through ebay for 20 U$, and when i went to pick it up at my local post office i had to pay 1,50 Euro first....

What i say is, that they are chances that he will be asked to pay taxes on the i phone, that might be quiet high..
( VAT is 23% in Greece)

quite high that is....lol

"Gifts" sent to the EU worth less than about €50 (the number moves with inflation) are exempt from import duty and VAT.

Over that, the recipient has to pay import duty (on technology, trivial), VAT (in Greece, 23% of the sum of the retail value, import duty and transport) and the carrier's fee for administering all this.

You will need to provide a formal statement of value, in a tightly prescribed form. This is different if you're using a courier company from the form you'll complete if using your country's post office - but the carrier will give you the forms.

Misdeclaration is a criminal offence, for which the "recipient" in theory may be taken to court if suspected of collusion, or the goods seized. It also, of course, invalidates any insurance the sender might have taken out on the consignment.

Everything coming through mail or courier Customs is x-rayed. How strictly clues are followed up depends on the administration's attitude (Greece is a great deal more interested these days in maximising revenue than it's ever been) and workload.

Since you are speaking of Greece, i can only repeat that there are random controls, have received many e bay orders in the past without having to pay anything, even though the value was way higher than 50 Euros...

The difference between the Hellenic Post and a courier like UPS... is the very bad service of the Hellenic Post

Think about taking a more unconventional approach. Look for someone going to Greece who will take it there for you and who will make sure your friend gets it. It should't be too hard to find someone who's willing from one of these travel advice websites. Depending on where in Greece your friend lives there are "Destination Experts" on tripadvisor.com who might be able to help you, or you can send a PM to those prospective travellers who have written in for advice and who are going there soon.

Unlocked and contract free iPhone 5 costs from $649 for the 16GB to $849 for the 64GB model in the Apple Store. Add to that shipping and insurance costs, plus VAT etc and your friend will have a very expensive phone. Is that really cheaper than he could get an iPhone under contract with Cosmote or Vodafone Greece? Most people buy iPhones under contract because they are heavily subsidised by the carrier.

Following Heimdall's thread, if the price is cheaper to buy one in Greece perhaps you could just send your friend the money.

Good idea, Lee!

Heimdall not when it comes to an I Phone....

The discount you get is ridiculous........
an i Phone 5 16 GB costs 739 Euro, 32 GB 855 Euro
( without a contract)

With a contract ( Vodafone) 16 GB cost 652.90 Euro
32 GB 768.90 Euro

Clausar, that's not a very generous discount, I have to agree. Still, when you add state sales tax in the US, shipping and insurance charges, and the 23% VAT the recipient would be legally obliged to pay, that makes the total cost of an unlocked US iPhone close to what you pay under contract in Greece.

The phone will come with a US charger plug, so the Greek friend will either have to buy an Apple euro charger plug or use an adapter.

Your friend can order it from another EU country where they are cheaper. They will pay no import duties on it then.
For instance an unlocked iPhone 5 is available in the Netherlands for €654 for a 16Gb phone. With a bit of research they could no doubt find where is the cheapest place in Europe to buy one.

In the UK the 16GB iPhone 5 is listed at £529 (about €625 at the current rate).

I think the subject is not the friend buying an iPhone, but getting one as a present.....

Nothing to stop OP looking at European websites and finding one there to send to Greece. Provided the company's T&C allow sending a product to another country that is. They'll accept a US credit card just as happily as a European one.
Sending one from the US results in the receiver paying a lot of tax and handling charges on their gift.

So perhaps my original suggestion is still one that would save money: find someone going to Greece and send it along with them.

Thanks sooo much! I told my son to just take it with him when he goes this summer, but his friend wanted it sooner. Now, with all your great advice...it is another example of Mother (and you guys) knows best! He will have to wait until the summer. You info was very much appreciated and informative. Thanks again.