A few comments on this from an Indian perspective. Apple products are quite expensive here too, when compared against U.S. prices (plus sales tax). It may seem as if this is because of customs duties, but that’s not the entire story.
Many companies tend to have geographically differentiated pricing to expand their market and make more money. Even if the prices aren’t completely matching the local currency equivalent (with respect to USD) and local conditions, they would have some compensation applied.
Apple has historically been against differentiated pricing, especially for its hardware. It also focuses heavily on retaining its 35% (approx.) profit margins. Only on a few services has Apple reduced pricing in the recent years in some countries (for example, in India, Apple Arcade, Apple TV+ and Apple Music are priced at nearly one fourth of the U.S. prices, but iCloud is priced the same as in the U.S.).
I’m not saying that all Apple hardware products are sold at the USD price plus local customs duties and taxes in other regions, but almost all of them are. What’s more ridiculous is that the prices don’t go down much even when Apple is assembling products locally and doesn’t have to pay as much in duties (a few iPhone models are assembled in India).
Since Apple has this business model, people in India who do know of someone coming from the U.S. or Dubai or another country/location where these are cheaper ask them to purchase those there and bring them down. There are several “Bring me this from there (BMTFT)” groups on social media to connect people.
For individual travelers the duty free limit (legal) plus duty evasion (not legal) in certain cases offer big incentives not to buy locally. I’m sure there’s plenty of organized smuggling also going on.
Whatever metrics Apple is tracking on sales by country get skewed by this, tilting heavily towards U.S. and other countries and making them seem larger than they are, while also making the countries with typically weaker currencies and higher duties seem as smaller markets than they are. (I know Apple can get country wise usage numbers from its telemetry in iOS, the App Store and other Apple apps)
In many countries with high tarriffs, there are literally open "luggages" advertised in FB and IG, to bring stuff from the US into X.
Buyer gives a heads up and asks if there is enough space for X goods. If yes, buyer routes amazon orders to travaler's residence, and presto.
The charge is usually 7-9 USD per pound, although there are flat rates for lightweight items like SD cards and phones.
It has gotten so bad that there are people boarding planes just to do this.
Somehow custom authorities are not making a fuss. Although quantities are low enough and varied enough (no one is foolish enough to load 3 luggages full of prada handbags) that anyone caught at airport can make a legitimate argument they are bringing presents for extended family.
The importers in south america have therefore more or less gone out of business.
Yes Apppe basically doesnt bother trying to be competitive in countries outside the US. I guess they don't mind since their products still sell and they're raking in huge profits.
I would be ecstatic if I could buy a "$400 iPhone" for only $400.
Apple prices tend to be higher, not only in absolute terms, but also relative to their competitors. A Samsung phone that sells for $800 in the US might cost $900, while an Apple phone that sells for $800 in the US will cost over $1000.
A few years ago Apple used to "only" charge the same price in Euros as they did in USD. Well, not anymore! The German prices of the iPhone SE start at 519 € - around 571 USD (source: https://www.apple.com/de/iphone-se/). So India definitely isn't alone with the inflated prices...
That comparison is slightly misleading because the German price includes the local VAT. Tax-free price (unless I'm mistaken) would be approximately 436 euros, so more than in the US, but not 150 dollars more.
Does Brazil still have a 100% tariffs on foreign made electronics? And the US charges almost none to highly favoured nations ie. China. So $429 iPhone in the US will be over $800 after duties in Brazil. And this is not set by Apple but the Brazilian authorities.
The taxes vary and are around 60% in the case of the iPhone.
We have the ICMS in São Paulo (18%), the national tax on industrialized products (IPI – 15%) and the tax on imports (II – 16%). In addition to them, there is still PIS (2.10%) and Cofins (9.65%).
I just had that request from my girlfriend in the Netherlands to bring back an iPad mini in this trip because they're $100 less for the 256GB model here in Canada than they work out to in the Netherlands once exchange rates and taxes are considered.
Living close to the U.S. border, it's quite easy for me to do a 24-48 hour jaunt down to the U.S. - long enough to qualify for the customs exemptions and bring cheap electronics back to Canada. The only down side is that if anything goes wrong with them, I have to cross the border back to the U.S. to deal with warranty issues.
Having an address in the Netherlands and parents in the UK also means that I have similar benefits in the opposite direction, sometimes stuff is way cheaper in the UK or Europe and if I need it I just pick it up there when I'm there. The down side there being that they're obviously cabled for European or UK plugs which means I either need to replace the cables or, thankfully, most stuff is rechargeable via USB-C now, so all I need are European, British and American USB-C charging units and everything carries on as normal.
With effect from April 1, 2021, BCD on import of printed circuit board assembly (PCBA), camera modules and connectors will be raised to 2.5%. For PCBA and moulded plastic for manufacture of charger or adapter, duty will go up from existing 10% to 15%. Whereas, other inputs and parts of chargers will attract 10% duty.
Completely built-up units (CBUs) of battery chargers attract 15-20% customs duty while handsets attract 22.5%. Certain sub-assemblies of phones such as display panels, printed circuit boards, mechanics and die cut parts are also liable for 10% duty to encourage greater value addition in India.
From what I have heard the prices go up in Brazil and India are special cases because the governments mandate local parts and manufacturing. Their goal was never about cheaper electronics, rather to subsidize local expertise. The Apple cut is the same on a now more expensive item.
Those that smuggle devices often experience unhappiness about how they cannot get warranty repairs for foreign purchased phones because repairs must be made with more expensive locally manufactured parts and Apple refuses to eat the difference. I have heard there are papers that can be used to prove foreign phones can use foreign parts without fees, but the local shops/repair depots are unwilling/untrained to help process that paperwork (and the replacements need even more time to be imported).
Even when repairs were authorized shipping and parts issues would take weeks. And no home shipping because issues finding trustworthy delivery so often six hour drive to the store often to be refused service or have to drive six hours weeks later. I am sure Apple could smooth out these issues (and hopefully has) but a lot of the issues likely arose from being cautious to avoid extreme fines.
I would rate both those countries as near Russia on how fun it is to own an Apple product in need of repair. (Samsung I have heard does not have the same issues is the same region).
I always know something with the customs/duty is off there when arriving in Delhi and seeing everybody with a brand new TV as their checked luggage :) Hopefully apple having stores in the country gives them better market visibility as I think the new SE is a fantastic phone for the Indian market. And remember to avoid buying the Dubai version of the iPhone as they turn off facetime (i had to live with this choice for 2 years)
> Whatever metrics Apple is tracking on sales by country get skewed by this, tilting heavily towards U.S. and other countries and making them seem larger than they are, while also making the countries with typically weaker currencies and higher duties seem as smaller markets than they are.
They can most likely see analytics on which country is using how many of their devices. Where the device was bought would be just one metric. Where the device is being mostly used would be the more important metric here.
Many companies tend to have geographically differentiated pricing to expand their market and make more money. Even if the prices aren’t completely matching the local currency equivalent (with respect to USD) and local conditions, they would have some compensation applied.
Apple has historically been against differentiated pricing, especially for its hardware. It also focuses heavily on retaining its 35% (approx.) profit margins. Only on a few services has Apple reduced pricing in the recent years in some countries (for example, in India, Apple Arcade, Apple TV+ and Apple Music are priced at nearly one fourth of the U.S. prices, but iCloud is priced the same as in the U.S.).
I’m not saying that all Apple hardware products are sold at the USD price plus local customs duties and taxes in other regions, but almost all of them are. What’s more ridiculous is that the prices don’t go down much even when Apple is assembling products locally and doesn’t have to pay as much in duties (a few iPhone models are assembled in India).
Since Apple has this business model, people in India who do know of someone coming from the U.S. or Dubai or another country/location where these are cheaper ask them to purchase those there and bring them down. There are several “Bring me this from there (BMTFT)” groups on social media to connect people.
For individual travelers the duty free limit (legal) plus duty evasion (not legal) in certain cases offer big incentives not to buy locally. I’m sure there’s plenty of organized smuggling also going on.
Whatever metrics Apple is tracking on sales by country get skewed by this, tilting heavily towards U.S. and other countries and making them seem larger than they are, while also making the countries with typically weaker currencies and higher duties seem as smaller markets than they are. (I know Apple can get country wise usage numbers from its telemetry in iOS, the App Store and other Apple apps)