FX | Global | Monetary Policy & Inflation
Which Country Has The Cheapest iPhone?
- By Sam van de Schootbrugge
- 1 min read
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Apple’s October ‘special event’ is just one week away, spelling the arrival of a new iPhone – probably the 12. In the run-up to this annual event, iPhone excitement is at fever pitch (Chart 1). With speculation mounting around the upcoming model’s price, we assess which countries get value for money on the iPhone 11.
In theory, prices of identical products should be the same across all countries once converted back into dollars. However, when we scan the global prices for an iPhone 11 (64GB), we find dramatic differences (Table 1).
After converting local prices into USD, we find that an iPhone 11 in Turkey costs 34% more than in the US. Turkey remains among the top five most overpriced countries in which to buy an iPhone, joined by Greece, a new addition to last year’s list. Brazil and India drop from the top five, reflecting an improvement in value for money.
Japan remains near the bottom of the list. It is the only country in which you can get an iPhone 11 for less than $769 (US price, which includes a 10% sales tax). After a significant year-on-year depreciation in RUB (vs USD), Russia also finds itself in the bottom five. Buying an iPhone 11 on the Apple Store in Moscow is only around 1% more expensive than doing so online in New York.
Any differences should be due to taxes and duties. Indeed, after excluding sales taxes and import duties from the cost of an imported iPhone 11, the relative price in almost all countries gets nearer to that in the US. In fact, after accounting for a 10% higher sales tax and transportation costs, Russia turns out to be the cheapest place to get your new phone!
The year-on-year analysis is fascinating. While annual depreciations against the USD in countries like Russia and Brazil have translated into better value for money for residents, iPhone customers in Turkey have been less lucky (perhaps partly due to President Erdogan’s new special consumption tax).
With the USD losing some of its value recently, can we expect relatively higher iPhone 12 prices next year? Come back in 12 months to find out…
Sam van de Schootbrugge is a macro research economist taking a one year industrial break from his Ph.D. in Economics. He has 2 years of experience working in government and has an MPhil degree in Economic Research from the University of Cambridge. His research expertise are in international finance, macroeconomics and fiscal policy.
(The commentary contained in the above article does not constitute an offer or a solicitation, or a recommendation to implement or liquidate an investment or to carry out any other transaction. It should not be used as a basis for any investment decision or other decision. Any investment decision should be based on appropriate professional advice specific to your needs.)
OK and I thought iPhone’s in Pakistan were expensive.