What Drives Phone Prices Across Countries?

It would not be too difficult to show evidence that phones cost more in some markets than in others. Some might ask “why” that is so. Import tariffs, service provider business practices, “domestic content” rules, differences in end user demand and overall price levels might be cited as possible contributors to price differences. 

Some argue iPhones cost more in the United States than elsewhere. Others say Apple iPhone prices have been shown to be lower in the United States than in other countries. Perhaps the same sorts of disagreements will hold for devices in different price ranges as well. 

Differences in demand account for some of the disparities in average prices marketwide. But demand arguably should not affect retail prices for the same device, sold in different markets, at the same time. Yet some differences exist. 

A 2017 comparison showed U.S. iPhone 7 costs of $815, while the iPhone 6s is $707. The highest iPhone prices are observed in Turkey, Brazil, and Russia, where prices were $1200, $1115, and $1086 for the iPhone 7 respectively. 

The iPhone 6s, costing on average $707 in the United States, retailed for $1080 in Brazil, $1032 in Turkey, and $943 in Russia. One suspects import tariffs account for much of the difference. 

Product demand obviously will explain much of the device cost differential: consumers in some markets buy less expensive devices, on average. 

But not to be ignored are disparate price levels across different nations. Costs for the same product-- adjusted for purchasing power--can have quite a range. The idea is that costs of living vary between countries, so, by definition, prices are higher in some countries, lower in others. 

Some studies suggest average smartphone selling prices are directly related to per-person gross domestic product, for example. 

Phone ownership and use might not be as different as one expects, across lower-income and higher-income countries, however.  

Differences in gross domestic product might explain differing price levels between countries. That should then flow through to mobile and fixed network service prices and virtually all other products.   

source: Statista