The most expensive countries for buying an iPhone

by on August 5, 2017 at 12:42 am in Data Source, Uncategorized, Web/Tech | Permalink

1. Turkey $1200

2. Brazil $1,115

3. Russia, $1,086

4. Greece $1,028

5. Poland $1,005

6. Italy $995

7. Czech Republic $994

8. Norway $993

9. Denmark $986

10. Sweden $982

See the whole list, but the United States is cheapest at $815, tied with Japan, with Hong Kong next at $821.  One lesson is that having crummy, overregulated retailing is worse for some of your prices than being an expensive country.

1 Harry August 5, 2017 at 12:56 am

Wait, an iphone STILL costs 815$ in the US? I guess there really is a sucker born every minute.

2 Anonymous August 5, 2017 at 8:15 am

Super-premium phones are expensive across the board (Google Pixel $649). I don’t feel the need to be on that cutting edge, but I don’t mind the effort. Lower end buyers get those features in a cycle or two.

I don’t consider these iPhone prices from Turkey to the US horribly different. Not for a luxury product.

3 BC August 5, 2017 at 9:17 am

A difference of 1200/815 -1 = 47% is not “horribly different”?

4 mkt42 August 5, 2017 at 1:13 pm

47% price differences exist everywhere in the world. Heck, last weekend I was just an hour away from Portland OR, where gas prices near I-5 were $2.89 per gallon, and was delighted to see all over Salem and Albany prices at $2.33 per gallon. That’s a 24% difference without having to cross any state borders much less national borders, and traveling only an hour by car.

The Big Mac Index on wikipedia lists the USA at $5.06 and Russia at $2.15, over a 100% difference! The Economist’s Big Mac Index has the USA 58% higher than Japan.

I was surprised that the worldwide prices are so similar for iPhones.

5 Anonymous August 5, 2017 at 5:25 pm

Another way to look at it is $1000 +/- $200. Basically a thousand dollar phone, wherever.

6 GoneWithTheWind August 5, 2017 at 10:36 am

I’m not really a phone aficionado and I could be wrong. But I got a android phone from AT&T for free. Yes free no contract no payments etc. I’m not really sure that the iphone would do much if anything useful that my free android doesn’t do. Now as I said I’m not a big time user of the phone, I keep it shut off for days even weeks, don’t take it with me when I leave home and rarely use it except to tether or search for something on google. But paying $815 for a phone just seems excessive to me.

7 Antho42 August 5, 2017 at 1:25 pm

That was not a free phone. Most likely got a phone that retails about 200 dollars. Most high end Android phones are in iPhone territory when it comes to price.

8 GoneWithTheWind August 5, 2017 at 2:13 pm

“That was not a free phone.” Explain that. It was indeed free. The 4g AT&T service is $40 a month even if you use your own phone. Normally this phone costs $45 if you start service with them but they had a special and the phone was free. It may well be worth $200 more or less but it is a typical smart phone and does what the rest of the android phones do. I confess that if it didn’t do what all the other phones do I wouldn’t know it I rarely use if for anything except to tether my laptop or look up something on google. I always joke that the only reason I have a cell phone is so I can call 911 if I need to. I really like not having a home phone and having my cell phone shut off all the time. It has been years and years since I actually got a call. No wrong numbers, cold calls or survey’s, yea!

No, wait! I was wrong. My previous phone did ring once but I knew it had to be a wrong number so I didn’t answer it.

9 Dsgntd_plyr August 7, 2017 at 3:26 pm

The phone’s price is included in your monthly bill.

10 GoneWithTheWind August 7, 2017 at 6:49 pm

“The phone’s price is included in your monthly bill.”
That is the common practice. But not in this case. Ordinarily the phone costs $45. As luck would have it they were having a deal that day and the phone was free. The cost of service is $40 a month if you have your own phone and $40 a month if you purchase their phone for cash. Being a cheap SOB I was looking for free and it was pure luck that I found it.

11 Bob August 6, 2017 at 12:10 am

Free Android phones (or most Android phones that aren’t called Nexus or Pixel) are giant security risks. If you aren’t going to use the “smart” features, like logging in to email, or even worse, a bank, you could do worse, but in practice, you are so far back in security vulnerabilities that you are one wrong link or download away from identity theft or worse. It’s not even safe to tether: Imagine the fun when your phone decides to just man-in-the-middle your connection to any semi-important website, and pass your login information onward.

I’d not say that you should buy an $800+, top of the line iPhone, but you should understand that running a version of android that isn’t 100% up to date (and as I was saying before, if it doesn’t come from Google directly, chances are you will permanently be 6 months out of date, if not more), you are taking a security risk.

12 GoneWithTheWind August 7, 2017 at 10:06 am

I think the safety of internet security measures/software is exaggerated. There is nothing safe on line and believing your hardware or software is safe is a mistake. I do nothing on-line that I need to keep secret. I have never banked on-line and consider that to be a stupid choice. I have nothing on my phone, no pictures, no messages, no text, no email. It sits shut off for days or weeks at a time, I don’t carry it with me. All of these things are what I like best about my phone. What I like the least is that it isn’t a flip phone, it is too big, too delicate and both of these things are a large part of why I don’t carry it with me. In fact I am thinking of just canceling the service and becoming phoneless.

13 Dan Lavatan-Jeltz August 5, 2017 at 12:56 am

And once again, no mention of the fact that in every country you can get an objectively much better phone for far less than $815.

14 Ray Lopez August 5, 2017 at 1:52 am

Yes, I got my “Cherry Mobile” smart phone in the Philippines for something like $60. It’s a piece of junk, but it does the jobs that I want (make calls, calendar, a cheap camera with no flash, which I don’t mind, an alarm clock). But smart phones are status symbols, so my hot 20-something Filipina half my age wanted a Samsung (Galaxy I think, forget the model) so I shelled out the $500 to $600 to get it about two years ago. Now she says it’s not the latest model and has some software bugs so we’ll give it to her mom and maybe get an iPhone. Here in the USA, I like an old AT&T “flip top” 3-tap dumb phone that also does what I want, with a cheap no-flash camera that makes a loud ‘shutter clicking sound’ LOL, design from the 1990s, but has a 4G or whatever CDMA chip in it that has excellent reception even indoors. For the USA I suggest going to a generic carrier like Cricket Mobile, where you pay one-fourth the price of Verizon, AT&T, etc every month. You can’t make international calls but that’s what PCs and Skype are for IMO.

15 Alvin August 5, 2017 at 3:04 am

I also prefer a dumb phone. My company gave me a new iPhone and I keep it turned off more than 99% of the time. Only time I’ve used it is on business trips to find new locations on maps using GPS.

Ray, I have to ask you something personal. You live in a very cheap country, with cheap, available girls, yet you have what sounds like a high maintenance girlfriend. Why??? Why bother with buying gifts, dinners, trips, etc, when you can get almost any chick for a relatively low price without the conversation, dates, baggage and headaches?

16 dearieme August 5, 2017 at 7:43 am

Imaginary girlfriends cost nothing.

17 msgkings August 5, 2017 at 12:51 pm

But real hookers cost something. Not much in the Philippines though.

18 Ray Lopez August 5, 2017 at 3:51 pm

@dearieme – you flatter yourself my fiend if you think I am writing all this just to humor an anonymous person like you. As for authenticity, everything I write here is real and if I wanted to I could even prove it.

19 Ray Lopez August 5, 2017 at 3:47 pm

@Alvin – “Why bother with buying gifts, dinners, trips, etc, when you can get almost any chick for a relatively low price” – it’s the difference between renting vs owning my friend, she’s my fiancé. Of course a short-time girl costs less if all you want is sex rather than making her happy.

20 William Woody August 5, 2017 at 8:23 am

“Yes, I got my “Cherry Mobile” smart phone in the Philippines for something like $60. It’s a piece of junk, …”

But that’s not “objectively better”, unless for you “objectively better” is “cheaper”–at which point we’re in the realm of circular reasoning.

And while I don’t have a problem with that (blah blah consumer choice blah blah), the implication of the original comment that consumers who have a preference for more expensive but feature laden phones are “stupid” strike me as the first step towards socialism–as that first step requires us to not have respect for the fact that other people may make different choices.

After all, if you don’t like their choices, it’s easy to take those choices away in the name of “making a better society.”

21 prior_test3 August 5, 2017 at 1:19 am

Luckily, the article itself details why this listing is not exactly accurate – ‘It should be noted that the comparison is based on prices quoted on Apple’s website, and different tax treatments in different countries mean that the numbers are not always directly equivalent. U.S. prices don’t include sales tax, which would be payable by most buyers, while U.K. ones do include VAT – making the USA price appear lower than it really is.’

22 Ray Lopez August 5, 2017 at 2:04 am

Yes, and I wonder if exchange rates are also an issue, a sort of “Apple” index to rival the Economist magazine “Big Mac” index?

And do you know what TC means by this: “See the whole list, but the United States is cheapest at $815, tied with Japan, with Hong Kong next at $821. One lesson is that having crummy, overregulated retailing is worse for some of your prices than being an expensive country.” -??? I happen to know that Greece is not “overregulated” by any stretch of the imagination–for example there are no right to return any product (same as in the Philippines, also not ‘overregulated’) and you have to go back to the manufacturer if anything breaks once you walk out the retail store, so what does TC mean? In Greece they do have anti-competitive laws with certain stores like drug stores (you cannot by law open another drug store in the same block) but not in the Philippines. Further, in the Philippines ‘new’ stuff is sold often with defects (it’s a dumping ground for any defective merchandise from First World countries–*all* ‘new’ things in PH are defective–ALL–no exceptions). So what are the ‘overregulated’ aspects of these countries? I think what is going on for high prices is the same reason food is so expensive in Arizona: there’s no volume, and they truck veggies from California, and no water, and thus prices are expensive–as they are in New Zealand–because it’s in the middle of nowhere. That’s my best guess for the high prices. That and in Greece you need in import permit that requires a large bribe which is added onto the price of the retail goods. But that’s not ‘overregulation’ IMO, just corruption and low volume, and high transportation costs.

23 dearieme August 5, 2017 at 7:44 am

“you need in import permit … But that’s not ‘overregulation’ IMO”: eh?

24 Nick August 8, 2017 at 11:41 am

Benn Steil at the Council on Foreign Relations created an alternative to the Big Mac Index that compares the price of iPad minis across countries. Here’s his latest post: https://www.cfr.org/blog/how-fairly-valued-chinas-currency-big-mac-and-mini-mac-square-again

25 prior_test3 August 5, 2017 at 2:14 am

‘And I wonder if exchange rates are also an issue’

From the article – ‘The combination of political instability in Turkey and the big ramp in US dollar appreciation against global currencies […] smashed the Lira late last year. As a result, Turkey has replaced Brazil as the most expensive place in the countries surveyed to buy an iPhone.’

26 Joan August 5, 2017 at 5:53 am

Also many countries have a VAT which is included in the price but sales taxes are not.

27 Steve August 5, 2017 at 6:57 am

A story too good to check.

28 prior_test3 August 5, 2017 at 7:01 am

Pretty much sums it up, though for ‘check’ one could also simply say ‘read.’

Seems like the real point was mood affiiliation – ‘crummy, overregulated retailing is worse.’

29 Alan August 5, 2017 at 7:21 am

Buy in Delaware. No sales tax.

I love that we pay the prices on the tags in stores. Yet I don’t really understand this except on simplicity grounds. I rerely use cash anymore, but the annoyance when shopping in MD and PA persist.

30 William Woody August 5, 2017 at 8:19 am

Came here to say the same thing. Turkey has a VAT of 18%, for example, though that does not account for the full 47% price increase between the U.S. and Turkey.

31 BC August 5, 2017 at 11:49 am

Congratulations to Tyler for finally getting so many people to acknowledge that costs nominally imposed on firms, such as VAT, are better thought of as being paid by consumers rather than “greedy corporations”. In addition to VAT, also included in these prices are regulatory costs, mandated employee vacations (including the right to get back vacation days when one is sick during vacation) and other benefits like maternity leave, and costs associated with inflexible labor markets. Of course, subtracting these costs from the prices makes no more sense than subtracting VAT — the point of looking at price differentials is to understand the impact of these various factors.

It might make sense in some cases to add sales tax to US prices. However, the single-digit sales taxes in most states is much smaller than the double-digit European VATs, and many states (NH,OR,MT,DE,AK) have no sales tax while some states like MA have periodic sales tax holidays. Also, many online purchases can be sales tax free.

32 prior_test3 August 5, 2017 at 12:18 pm

‘Congratulations to Tyler for finally getting so many people to acknowledge that costs nominally imposed on firms, such as VAT, are better thought of as being paid by consumers rather than “greedy corporations”.’

No, what most people were pointing out that comparing a price of something including VAT to a price of the same thing that excludes VAT/sales tax (the distinction is not all that meaningful in this case) is either lazy, or deceptive.

And for the record – VAT is generally only paid by the final purchaser, with exactly the same effect as a purchaser paying a sales tax. (A sales tax has a lot less paperwork associated with it, no question.)

‘In addition to VAT, also included in these prices are regulatory costs, mandated employee vacations (including the right to get back vacation days when one is sick during vacation) and other benefits like maternity leave, and costs associated with inflexible labor markets.’

Which actually does not explain that if one were to remove the 25% VAT from the Swedish iPhone, it costs less than the untaxed American one.

‘Of course, subtracting these costs from the prices makes no more sense than subtracting VAT — the point of looking at price differentials is to understand the impact of these various factors.’

Well, if one would subtract those costs from an iPhone in Sweden, the price would be lower still.

This may not be the point you are trying to make, actually.

33 Anon7 August 5, 2017 at 5:06 pm

Yes, just the follow the example of Apple and domicile oneself in a state with low/no sales taxes instead of blue states that model themselves after socialist hellholes like Germany.

34 Bob August 5, 2017 at 1:23 am

In Europe, I believe most cell phones are through pay-as-you-go plans. Whereas in the US, most iPhones and other high end smartphones bought through multi-year contracts through carriers that subsidize the cost of the phone. Does this take that into account?

35 Careless August 5, 2017 at 2:32 am

carriers aren’t really subsidizing the costs of the phones anymore. They just put the cost of the phone up front in an installment plan. $25 a month for 2 years, etc

36 surkus model August 5, 2017 at 1:33 am

U.S. price doesn’t include sales tax

37 prior_test3 August 5, 2017 at 2:11 am

And VAT in Sweden is 25%. Whereas if one were to buy an iPhone in NYC, the price would include a sales tax of 8.875%.

This is actually pretty typical for how American reporting works – the local patchwork of sales tax rates makes it common to simply ignore the sales tax when reporting on prices. And it makes things seem cheaper in the U.S. in comparison to other countries, which always plays well when reaching an American audience.

38 Lanigram August 5, 2017 at 1:33 am

Uhhhh…what’s up with the Czech Republic? That 4994 number stands out like an elephant hiding in a chicken coop.

39 Harry August 5, 2017 at 1:35 am

Obviously a typo, 4 instead of $.

40 Mal August 5, 2017 at 3:27 am

Wait, why is the iPhone 7 cheaper than the 6S in India – and only in India?

41 L. F. File August 5, 2017 at 5:23 am

So for most countries that’s a little over 3 months of good employer subsidized healthcare in the U.S.

lff

42 BC August 5, 2017 at 5:28 am

“One lesson is that having crummy, overregulated retailing is worse for some of your prices than being an expensive country.”

Why is it that we talk about distributional impact of tax policies but not regulations? Don’t most regulations that increase consumer prices have similar distributional impact to regressive sales taxes?

43 Paul August 5, 2017 at 5:37 am

I would claim that’s a pretty narrow range all things (like tax) considered.
The law of one price holds tolerably well here.

Consider for example the range of cost for the same model new car in different countries before tax. Much bigger range.

Time for an iPhone index.

44 Martín August 5, 2017 at 7:55 am

There’s a small problem with that, you have to use top of the line models as in the third world, most cars are built like wheeled caskets.

(Look for the latin-NCAP videos)

45 rayward August 5, 2017 at 7:22 am

It depends on who holds all those patents for the technology that make the i-phones work: https://www.nytimes.com/2017/08/04/technology/qualcomm-china-trump-tech-trade.html

46 Evans_KY August 5, 2017 at 7:40 am

How many of those countries have second-hand markets where the savvy consumer can maximize their investment? Who needs the latest and greatest when older models are sufficient?

47 Martín August 5, 2017 at 7:50 am

Argentina stands at a mere 1555usd (@18.00 exchange rate) so I think we won

https://www.garbarino.com/producto/celular-libre-apple-iphone-7-plateado-32gb/07632ce609

48 Kenneth Payne August 5, 2017 at 7:55 am

The US would look much worse if you added in the higher cost of data over the life of the phone. I just got a huge shock, paying $10 per GB; I was paying 2euro in Greece.

49 Nick_L August 5, 2017 at 10:05 am

True for Canada too – Canadian mobile usage fees are among the highest in the world.
http://media.tefficient.com/2016/12/tefficient-industry-analysis-5-2016-mobile-data-usage-and-pricing-1H-2016-ver-2.pdf

50 Thor August 5, 2017 at 12:05 pm

And how does that change? Can it change?

51 Colin August 5, 2017 at 12:12 pm

Not sure about Canada, but in the US the cost of wireless service is already dropping:

https://www.fool.com/investing/2017/06/11/the-cost-of-wireless-service-is-plummeting-as-pric.aspx

52 Florian August 5, 2017 at 7:58 am

I take issue with your “crummy retail” explanation.
1. VAT should be excluded in the comparison (just as sales tax is excluded for the USA). When you do that, you’ll find, that pre tax retail prices in every European country are actually LOWER than in the US.
2. We don’t know the wholesale prices Apple charges. They MIGHT be higher outside the USA. If they are, this would imply LOWER retail mark-ups outside the USA. And retail markups – not retail prices – really is the fair yard stick for local retail efficiency.

53 Colin August 5, 2017 at 9:48 am

Agreed. Also keep in mind import tariffs. As of 2013 the tariff on the importation of smartphones into Brazil, the #2 country listed here, was 16%.

54 Thiago Ribeiro August 5, 2017 at 11:39 am

Brazil does not need fancy toys. We are busy building rockets, nuclear plants, roads and hospitals.

55 Alvin August 5, 2017 at 5:06 pm

They don’t sell iPhones in Africa?

56 Curious August 5, 2017 at 7:00 pm

Although I am generally sympathetic to Tyler’s conclusion, I’m disappointed with this particular post. To wit, the stats posted do not support the conclusion well.

I happen to currently reside in Greece, and I know that the current VAT rate is 24%. A back of the envelope calculation gives us $815 + $815 * 25% = $1010.60 for the equivalent price of an iPhone in Greece. The cited article lists the price in Greece as 1028.

My German friends tell me that the VAT rate in Germany is 19%. Again, $815 + $815 * 19% = $969.85. The cited article list the price in Germany as $951.

It seems to me that VAT accounts for the overwhelming majority of the variation in price. Never mind exchange rates, import tariffs, transportation costs, regulation, etc. (Yes, Germany is slightly cheaper than Greece, but it’s not statistically significant. Do the arithmetic.)

Maybe there’s another blog hidden in here somewhere. Just not this one.

57 buddyglass August 5, 2017 at 7:32 pm

How does the “iPhone index” compare to the “Big Mac index”?

58 buddyglass August 5, 2017 at 7:37 pm

Link: http://www.economist.com/content/big-mac-index

For July 2017 the U.S. is one of the most expensive places to buy a Big Mac, bested only by Switzerland, Norway and Sweden. Among developed countries, the least expensive Big Macs seem to be in Asia. Taiwan, Hong Kong, then Japan. Least expensive Big Mac among developed western countries is Britain, followed by New Zealand and Australia.

59 Crikey August 6, 2017 at 9:41 pm

Holy bouncing burgers, Batman! What’s the point in even being American anymore?

60 Nick August 8, 2017 at 11:42 am
61 byomtov August 5, 2017 at 10:16 pm

Mercatus-level rigor.

62 Donna B. August 5, 2017 at 10:25 pm

When someone with an iPhone asks me for a loan of $50 bucks because they’re short on their rent. They get told NO. I’d probably say yes to someone with an ancient android, but I’ve never been asked by that person.

63 Infopractical August 7, 2017 at 10:56 am

Perhaps the value of the data on Americans is reason enough to subsidize the price.

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