Canadians are accustomed to encountering higher prices compared to their counterparts in the U.S., but the price disparity for the latest iPhone has raised eyebrows. Apple’s newly unveiled foldable phone, the iPhone Duo, is being sold in Canada for prices ranging from $2,999 to $4,799, excluding taxes.
In contrast, prices in the U.S. start at $1,999, equivalent to $2,760 in Canadian dollars, which means Canadians will need to shell out nearly 10% more for the base model. This price differential has sparked ridicule and banter on a Canadian Reddit forum, with one user suggesting that individuals spending such exorbitant amounts on a phone should undergo a financial literacy course.
University of Toronto economics professor Joseph Steinberg posits that the price increase likely indicates that Apple identified a segment of the Canadian market willing to purchase a “super-premium product” like the Duo without much concern for price, unlike American consumers. He mentions that it’s not uncommon for electronics and other goods to carry a higher price tag in Canada, but the exceptionally steep cost of this phone makes it particularly noteworthy.
Despite speculation that Canada’s new retaliatory tariffs on U.S. products may have influenced iPhone prices, experts have clarified that this is not the case. While smartphones are subject to tariffs in Canada, Steinberg explains that since iPhones are manufactured in China and not the U.S., they are not impacted by these tariffs. The origin of the product determines the application of tariffs, irrespective of the border crossing.
Werner Antweiler, chair in international trade policy at the University of British Columbia, points out that the escalation in smartphone prices globally is attributed to the microchip shortage, driven by the AI industry’s expansion and the proliferation of data centers. This surge in demand has led to increased manufacturing costs. He expresses surprise at Apple’s decision to raise prices specifically for Canadian consumers, although he acknowledges that price discrimination is a common strategy among U.S. companies, with Canadians often paying a premium due to the country’s smaller market size.
Apple has not responded to CBC News’ request for comment. The iPhone Duo was unveiled by Apple CEO John Ternus during a significant event marking a major shift in the company’s flagship product. Pre-orders for the Duo will commence on October 17, with the phone becoming available on October 23.