Canadians are accustomed to encountering higher price tags compared to their counterparts in the U.S., but the pricing disparity for the latest iPhone has raised eyebrows. Apple’s newest foldable phone, the iPhone Duo, was unveiled on Wednesday with prices ranging from $2,999 to $4,799 in Canada before taxes. In the U.S., prices start at $1,999, which is equivalent to $2,760 in Canadian dollars, resulting in Canadians having to shell out nearly 10% more for the basic model.
The substantial price hike sparked ridicule and banter on a Canadian Reddit forum, with one user suggesting individuals spending such amounts on a phone should undergo a financial literacy course. Another user humorously remarked that one could have previously purchased a car for the same amount.
According to University of Toronto economics professor Joseph Steinberg, the price increase likely indicates that Apple identified a segment of the Canadian population willing to purchase a “super-premium product” like the Duo, suggesting they are less sensitive to price compared to American consumers, enabling Apple to increase profit margins.
Contrary to speculation, experts assert that Canada’s newly imposed retaliatory tariffs on U.S. products do not impact the iPhone Duo’s pricing. While smartphones are on the list of U.S. products subjected to a 50% tariff, Canada does not significantly import these devices from the U.S. Moreover, the iPhone Duo is manufactured in China, exempting it from Canadian tariffs targeting U.S. goods.
Werner Antweiler, chair in international trade policy at the University of British Columbia, attributes the general rise in smartphone prices to the global microchip shortage spurred by the AI boom and the proliferation of data centers, fueling increased manufacturing costs. Despite the price hike for Canadian consumers by Apple, Antweiler notes it is a common strategy employed by U.S. companies, citing price discrimination practices influenced by market size differences between Canada and the U.S.
Apple has not responded to CBC News’ request for comments regarding the price increase. The unveiling of the iPhone Duo was led by Apple CEO John Ternus in his first public event since assuming the leadership role, with pre-orders commencing on Oct. 17 and the phone set for availability on Oct. 23.