You Won't Believe How Much an iPhone Really Costs Around the World
Since its introduction in 2007, Apple's iPhone has transformed the mobile landscape, and it's helped make Apple a pretty hefty chunk of change, too. But Apple's insistence on maintaining a hefty profit margin for its devices, which are typically among the highest-priced phones and tablets on the market, has cost it sales around the world as a host of competitors using Google's Android operating system push in with cheaper alternatives.
Just how costly are iPhones, though? Most Americans don't have to think too hard about the price of a new iPhone 5s, which is heavily subsidized by the country's three major mobile carriers -- if you sign a two-year contract with AT&T , Sprint , or Verizon , you can get the phone for $199. However, an unlocked iPhone 5s with 16 gigabytes of RAM will run you $649. You might think that's pretty expensive, but out of all major iPhone markets, there's only one country (Canada) where an unlocked iPhone 5s costs less, in dollar terms, than it does in the United States.
Let's look at some of the most expensive markets to get an idea of just how much it really costs to buy the iPhone 5s today.
3. Denmark: iPhone 5s costs $988.92 -- iPhones hold 46% of the market
Danes don't have it significantly worse than many of their European Union compatriots, most of whom also pay more than $900 for a new iPhone 5s, but it differs from the two costlier markets in two important ways. For one thing, the country has a much stronger economy on a per-capita basis, and it also has an excellent social safety net (supported by high taxes) that provides universal health care and free higher education. The Danish economy doesn't produce quite as much as America's on a per-capita basis (Denmark's GDP per capita is $42,173 when adjusted for purchasing power parity), but the Danish people don't seem to mind -- the country typically ranks as one of the happiest in the world.
Maybe that's because so many Danes have iPhones. With a 46% market share, Denmark is actually the most iPhone-friendly country on our entire list. Roughly 59% of the Danish population owned a smartphone in 2013, which is up from just 30% two years earlier. Danes don't seem to mind the high price of their iPhones, because their telecom industry is quite consumer-friendly by American standards -- service contracts are limited to six months, which discourages the subsidies Americans get with longer contracts, but which also pressures Danish telecoms to compete more intensely on service prices. Journalist Peter Nowak recently found that the average Danish mobile subscriber provides their carrier just $26.63 in revenue, compared with the whopping $64.11 in revenue per user American carrier Sprint reported just a few days ago. An excellent job market also helps more Danes afford costly smartphones, as only 4.3% of the population is currently unemployed.
2. Italy: iPhone 5s costs $996.32 -- iPhones hold 13% of the market
Italians show that Denmark is more an exception that proves the rule -- when people have less money, they typically buy cheaper phones. Italy generates only $33,174 in GDP per capita when adjusting for purchasing power parity, which makes it one of the weakest of the major European economies. Italy's economy has been weak for so long that its unemployment rate has been increasing since the ostensible end of the global financial crisis, and with 12.7% of the Italian workforce unemployed, there just aren't enough wage-earners in the country to go after a smartphone that costs about $1,000.
Italians are less apt to use smartphones than their Danish compatriots, as only 41% of the Italian populace owns a smartphone. Italians don't use their smartphones quite as intently as Danes, which also helps to explain the iPhone's lower penetration -- iPhone users are well known for their outsized impact on mobile browsing statistics compared to Android users. In fact, only 57% of Italy's smartphone users even had a data plan in 2013! Since the iPhone's major appeal is its use as a miniature connected computer, it's no wonder that smartphone-ambivalent Italians have thus far avoided its ridiculously high price.
1. Brazil: iPhone 5s costs $1,160.98 -- iPhones hold 4% of the market
Apple has largely ignored the Latin American market until recently, but if its first store in the region -- which opened just days ago in Rio de Janeiro -- is any indication, the company certainly couldn't care less about picking up market share. At 2,799 reals, which works out to almost $1,200, an unlocked iPhone in Brazil is by far the most expensive iPhone in the world. Since this price is offered to a country with less than a third of Italy's GDP per capita by purchasing power parity ($11,716), it should come as no surprise that very few Brazilians have iPhones.
Of course, Brazilians have fewer smartphones in general, as only 26% of the population currently owns one. It doesn't help that much of the country's interior has no wireless coverage, but even though the heavily populated regions near the coast have widespread coverage, Brazil has 4G service in only a few isolated spots in its very largest cities. The cost of a data plan is also prohibitively high for many Brazilians, as 5 gigabytes of data can cost almost $50 a month, which is a lot for the "emerging middle class" with an average monthly income of just $507. The deck is clearly stacked against Apple in Brazil, and Apple itself seems to be OK with that for the time being.
You can see the full list of the most expensive iPhone prices by country by scrolling further down.
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The article You Won't Believe How Much an iPhone Really Costs Around the World originally appeared on Fool.com.Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter, @TMFBiggles, for more insight into markets, history, and technology. The Motley Fool recommends and owns shares of Apple and Google. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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