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 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.
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.
Even before I clicked the link, I was sure the answer was Brazil. It's not so much the taxes that raise the prices as the tariffs (which are kind of invisible taxes in that they are paid through higher prices rather than directly—which is part of what made a former president's boasting about raising tariffs somewhat absurd. It seemed he believed that the exporting country paid the price of the tariffs and not domestic consumers in the form of higher prices). I remember that there were plans to build a Foxconn factory in Brazil specifically to manufacture iPhones for the Brazilian market because of the tariffs (I don't know if this ever happened, I think maybe it did?).
Isn't it referred to as Brazil Cost by economists. The only way to reduce the tariff is to manufacture locally. NOKIA did this and gained significant market share as a result 20+ years ago
If your market is large enough and the tariffs are high enough then it seems logical that tariffs will force the companies to manufacture their goods elsewhere to stay competitive and increase revenue.
Short term the tariffs are likely paid for by the exporting country, company and/or consumer (there's a limit to how much you can pass on to the consumer), whereas long term the goods will be manufactured/assembled in another country.
> which are kind of invisible taxes in that they are paid through higher prices rather than directly—which is part of what made a former president's boasting about raising tariffs somewhat absurd. It seemed he believed that the exporting country paid the price of the tariffs and not domestic consumers in the form of higher prices
Depends on the tariffs. If done correctly, they can be used to protect a local industry in its infancy until it is mature enough to compete on the world stage (assuming you don't stifle its own innovation via these subsidies).
But in this case, Brazil wasn't making an iPhone/Mac competitor
There is one other important factor that is seldom discussed: inequality. Even being so expensive, they still sell enough to make good profits, because there is enough rich people in Brazil to buy them once a year. Brazil has one of the higher inequalities in the world and while it’s common to say Brazil is poor, the truth is that there is a shitload of very rich people too (it’s more than 200M people after all). I’m sure things would change if people simply stopped buying them (or couldn’t afford).
Ah! Today morning, I woke up to the news of the new Apple products everywhere including Hackernews. As usual, for the kicks, I tried customizing the total spec-out version of the Apple Mac Studio.
This is costlier than most typical cars on Indian roads. And the Mac Studio cost do not include the keyboard, mouse, and monitor which is needed to make it the bare minimum usable computer.
That's about 9000 euro, about the same as the "trashcan mac" (i forget the marketing name) when they were still selling them. I think this one is a bit faster though :)
Some parts of this price ecosystem would have looked different if Samsung had decided to straighten up their act and not shovel out crapware, adware, and nagware with their so called "Updates" for their lower end phones. It's a lost opportunity for Samsung.
Apple gets to do this because their devices seem safer, easier, and faster to use right now.
From time to time, a software update comes. Every single time I look into change log only to read "Improved stability and security".
Few updates ago, when I took out my buds, only one was playing. Till today I need to disconnect and connect my buds to make them both work.
If only they would just leave the things as they were, or gave me option to rollback..
So much for "Improved stability and security" I guess. I'll never buy a Samsung headphones again.
In Brazil the start model of the new iPhone SE starts at 4200 brl or 835 usd, according to google.
The most famous apple joke in Brazil is that it's cheaper to go to US buy a top of the line iPhone, do some tourism and return to Brazil than buying it here.
Seems to be common practice here in Ecuador as well.
Ordering stuff online from anywhere outside of Ecuador is kind of a last resort, because of very high import duties for many items (and a small but real risk of your items getting "lost" by customs).
However if you are bringing that stuff back on a flight, that's exempt from import duties if you stick to the 2-item limit (e.g. don't come back with a suitcase full of iPhones, but if you're traveling back with your existing old phone and a new phone for yourself, that is allowed).
If you're rich enough to afford an iPhone here, you're not buying locally. You plan a shopping trip to Miami once or twice a year, the ticket cost is basically evened out by the savings of all the stuff you're buying in the USA and many people have family there as well they can visit (which is an extra reason to travel, and you're not staying in a hotel).
This makes me wonder how many industries stay underdeveloped due to high hardware prices.
Think of Nigeria movie industry, Brazilian game industry, or even the worldwide impact of high gpu prices due to crypto mining and scarce chips.
Brazil has only itself to blame. Not only Apple products, but several other technology items are pretty expensive due to the VAT (Value Added Taxes), namely, ICMS - state vat tax, IPI - federal vat tax for manufactured products, IOF - federal government tax that incurs on financial trasactions, and high import tariffs. All tariffs and taxes almost doubles the price of everything imported and whenever a product is sold to a distributor and the final seller, state and federal VAT taxes adds up increasing the price even further. Unlike the global north, most of taxes revenues in Brazil come from VAT taxes since brazilian middle class is not willing to pay higher income tax and at the same time they want US-style taxes and European-like lifestyle, such as ree healthcare and free college that are paid in Europe mostly through income tax revenues and dividend tax revenues. So despite higher taxes, it it is not that bad for the upper class and those who can afford Apple gadgets as they would have to pay higher income taxes if they moved to Europe, US or other countries. In Brazil even dividends are not taxed, while in US and Erope they are taxed and companies have to use stock buybacks in order to avoid double taxation.
I lived in Brazil, and my well-off friends bought their Macs smuggled from Paraguay. Still, at Paraguay prices a MacBook Pro used to cost about 10x the minimum wage.
My friends in California enjoy railing against systemic racism except when it's a system that results in my fellow Indians and myself paying more money for the same iPhone. Obviously it's because of import duties and taxes which have nothing to do with Apple, but I'm sure the richest company in the world that is committed to the cause of social justice can find a way to make the pricing fair ;)
My Brazilian friend asked me to recommend her a laptop given her budget. It was certainly an interesting experience. Not only the laptops were much more expensive than they would be in other parts of the world, but also they were older models, with HDDs and 4GB of RAM instead of more up to date models going with SSDs and 8GB of RAM (or more).
Did you consider buying one in the US (or wherever you are/online) and then mailing it to them?
I recently was going to mail a new Mac M1 to a university student in a foreign country. I found services that specialized in it that would do it for $99, FWIW
I would imagine local laws regarding warranties would also affect pricing. For example, in the US you get one year of warranty, and that's it. In some other countries, there are longer mandatory warranty periods for expensive items. Presumably part of the reason Apple products are more expensive in those countries is that they are on the hook for more warranty service.
Interestingly, this means Apple might not care that foreign tourists snap up Apple products when visiting the US. They might claim that those products don't qualify for the enhanced local warranty when the tourists return to their home countries. /speculation
I don't think better warranties explain it. In Europe where 2 year warranties are mandated UK prices for a MacBook Pro 14 base model (after excluding 20% VAT) are only 3.6% higher than the US price while German prices (after excluding 19% VAT) are 14% lower at current exchange rates. The Brazilian cash price (10% less than the headline price which includes financing on the Apple store) seems to be 25% higher than the US price after accounting for 17% sales tax and 60% import duty.
> “Yeah, Apple’s products are pretty good, probably the best depending on what you need from them, but at the end of the day they are not that different from the cheaper alternatives and not really worth the extra money unless you have a lot to spare”. Which, it seems to me, is pretty much what you are going to hear from most people about Apple products anywhere in the world.
This could not be further from the truth. I imagine the number of people who think iPhones are the superior product outnumber the number of people who don't really care, and I'd be among them.
Countries like India and Brazil are so stratified in terms of wealth that you essentially have people who have no chance of affording it, ever, and people with the same or more disposable income as those in the west. So the strategy is to simply get as much as possible out of the 'rich' people who will buy it as a status symbol.
It's a long time ago but I once made a business trip to Brazil where local colleagues attempted to explain the reason behind these high prices. I don't remember everything but one example stuck with me: the government forcing the shipment of the incoming goods into a particular harbor that is far away from the end destination, as an attempt to provide them work, and perhaps apply local tariffs. Next, this product needs to be shipped again, probably by air, to the place it needs to be. So it's the distribution of work for the sake of work, keeping each other busy I guess.
The other odd thing I noticed back then is electronics that exist nowhere else. For example, an electronics company you may only know for their TVs suddenly also has laptops and phones. But only in Brazil. I guess they are white label products that are rebranded, as part of the "wealth signaling" the author talked about.
Also in my country, very expensive. Therefore, I order from Apple USA directly and import through courier. The exchange rate, courier fee and 15 day arrival 'delay' are much more tolerable than what I would pay for locally at the 'iStore'.
While working on a BigCo product that produced invoices to advertisers in different countries I learned that there are different local laws around invoicing and how a final price is shown to a customer. In the US all prices in our application were exclusive of taxes, which were added after a total cost for customer was computed. For Brazil, a multi month and multi team effort ensued to assure variable tax rates could be applied to different customers and so a only a final price/cost inclusive of “taxes” would be shown to advertisers.
… this makes me wonder if taxes/“cost of doing business” is the true cause (something the author waves away without data, and which I don’t have either :) …
Brazil also has world's most expensive cars. We build cars in Brazilian factories and sell them in other countries cheaper than we sell in the local market.
And the reason for that is.. that we pay the price. For some reason we accept to pay a higher price than any other country, even though there's a lot of competition (maybe the companies form a cartel here? But why here and not in the rest of the world?)
I still think the reason are custom duties (which I think is something immoral), and anything else is just a consequence. Buying an Apple product from elsewhere is more expensive than buying one here. If that wasn't the case, people would just import the products, and the local businesses would have to adjust or risk bankruptcy.
[+] [-] wtmt|4 years ago|reply
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)
[+] [-] IG_Semmelweiss|4 years ago|reply
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.
[+] [-] Synaesthesia|4 years ago|reply
[+] [-] balabaster|4 years ago|reply
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.
[+] [-] ksec|4 years ago|reply
You still have to pay import tax on components made outside of India. The assembly line only get Apple some tax incentives.
[+] [-] MthN|4 years ago|reply
US - $999
India - ₹92,900 ≅ $1,213
India(without GST) = ₹78,728 ≅ $1027
UK - £999 ≅ $1316
UK(without VAT) - £832.5 ≅ $1,096
iPhone 13
US - $799
India - ₹79,900 ≅ $1,043
India(without GST) - ₹67,711 ≅ $884
UK - £779 ≅ $1,025
UK(without VAT) - £649 ≅ $854
[+] [-] LexGray|4 years ago|reply
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).
[+] [-] kylehotchkiss|4 years ago|reply
[+] [-] vrdmn|4 years ago|reply
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.
[+] [-] dhosek|4 years ago|reply
[+] [-] dougSF70|4 years ago|reply
[+] [-] legofr|4 years ago|reply
Short term the tariffs are likely paid for by the exporting country, company and/or consumer (there's a limit to how much you can pass on to the consumer), whereas long term the goods will be manufactured/assembled in another country.
[+] [-] kikoreis|4 years ago|reply
It was inaugurated in 2012 and indeed for a few years did produce Apple devices, specifically iPads, but AFAIK in 2017 they shut down the line: https://diariodonordeste.verdesmares.com.br/negocios/apple-e...
[+] [-] shultays|4 years ago|reply
[+] [-] acchow|4 years ago|reply
Depends on the tariffs. If done correctly, they can be used to protect a local industry in its infancy until it is mature enough to compete on the world stage (assuming you don't stifle its own innovation via these subsidies).
But in this case, Brazil wasn't making an iPhone/Mac competitor
[+] [-] stavros|4 years ago|reply
Wow, how does a president think this?
[+] [-] low_tech_love|4 years ago|reply
[+] [-] tomxor|4 years ago|reply
In most countries Apple's market is the top 1%
[+] [-] unknown|4 years ago|reply
[deleted]
[+] [-] Brajeshwar|4 years ago|reply
This is costlier than most typical cars on Indian roads. And the Mac Studio cost do not include the keyboard, mouse, and monitor which is needed to make it the bare minimum usable computer.
https://twitter.com/brajeshwar/status/1501440907295752193
[+] [-] droopyEyelids|4 years ago|reply
“25% of cars on the road are are at least 16 years old”
https://www.cnbc.com/2020/07/28/25percent-of-cars-in-us-are-...
A 16 year old car that people drive not usually worth $10k.
[+] [-] andai|4 years ago|reply
[+] [-] windex|4 years ago|reply
Apple gets to do this because their devices seem safer, easier, and faster to use right now.
[+] [-] MaxikCZ|4 years ago|reply
From time to time, a software update comes. Every single time I look into change log only to read "Improved stability and security".
Few updates ago, when I took out my buds, only one was playing. Till today I need to disconnect and connect my buds to make them both work.
If only they would just leave the things as they were, or gave me option to rollback.. So much for "Improved stability and security" I guess. I'll never buy a Samsung headphones again.
[+] [-] llampx|4 years ago|reply
[+] [-] arepublicadoceu|4 years ago|reply
The most famous apple joke in Brazil is that it's cheaper to go to US buy a top of the line iPhone, do some tourism and return to Brazil than buying it here.
[+] [-] warp|4 years ago|reply
Ordering stuff online from anywhere outside of Ecuador is kind of a last resort, because of very high import duties for many items (and a small but real risk of your items getting "lost" by customs).
However if you are bringing that stuff back on a flight, that's exempt from import duties if you stick to the 2-item limit (e.g. don't come back with a suitcase full of iPhones, but if you're traveling back with your existing old phone and a new phone for yourself, that is allowed).
If you're rich enough to afford an iPhone here, you're not buying locally. You plan a shopping trip to Miami once or twice a year, the ticket cost is basically evened out by the savings of all the stuff you're buying in the USA and many people have family there as well they can visit (which is an extra reason to travel, and you're not staying in a hotel).
[+] [-] elvenodid|4 years ago|reply
[+] [-] gwmnxnp_516a|4 years ago|reply
[+] [-] protontorpedo|4 years ago|reply
[+] [-] fareesh|4 years ago|reply
[+] [-] skocznymroczny|4 years ago|reply
[+] [-] gavinray|4 years ago|reply
I recently was going to mail a new Mac M1 to a university student in a foreign country. I found services that specialized in it that would do it for $99, FWIW
[+] [-] gnicholas|4 years ago|reply
Interestingly, this means Apple might not care that foreign tourists snap up Apple products when visiting the US. They might claim that those products don't qualify for the enhanced local warranty when the tourists return to their home countries. /speculation
[+] [-] laurencerowe|4 years ago|reply
[+] [-] acchow|4 years ago|reply
This could not be further from the truth. I imagine the number of people who think iPhones are the superior product outnumber the number of people who don't really care, and I'd be among them.
[+] [-] Mikeb85|4 years ago|reply
[+] [-] fleddr|4 years ago|reply
The other odd thing I noticed back then is electronics that exist nowhere else. For example, an electronics company you may only know for their TVs suddenly also has laptops and phones. But only in Brazil. I guess they are white label products that are rebranded, as part of the "wealth signaling" the author talked about.
[+] [-] ArcMex|4 years ago|reply
[+] [-] d136o|4 years ago|reply
… this makes me wonder if taxes/“cost of doing business” is the true cause (something the author waves away without data, and which I don’t have either :) …
[+] [-] nextaccountic|4 years ago|reply
https://www.automotiveworld.com/uncategorised/89068-brazil-h...
And the reason for that is.. that we pay the price. For some reason we accept to pay a higher price than any other country, even though there's a lot of competition (maybe the companies form a cartel here? But why here and not in the rest of the world?)
[+] [-] milkers|4 years ago|reply
[+] [-] unknown|4 years ago|reply
[deleted]
[+] [-] Pmop|4 years ago|reply