Apple’s iPhone 4S this evening hit Chile and Brazil and boy is it overpriced. The company’s online store has the R$ 2599 price tag attached to the 16GB SIM-free version. The 32GB/64GB versions of the popular smartphone sell for R$ 2999/R$ 3399. The exchange rate of Brazilian dollar is approximately R$ 1.71 to USD 1.00 so you get the picture.

Just to give you a little feel, the unlocked 64GB iPhone 4S in Brazil sells for three times its $849 U.S. asking price, or a whopping $2,000. This slideshow cleverly depicts what this amount of money can buy folks in Brazil. Turns out you can get a decent fridge, a big screen Sony Bravia TV or even an entry-level Ford car for the price of an unlocked 64GB iPhone 4S. Insane!

So, why those exorbitant price points?



A comparison of approximately two times higher iPhone prices in Brazil compared to the United States. Chart courtesy of The Next Web.

See, those handsets are most likely made in China and imported into Brazil. And because the country applies very high taxes to imported electronics (the full breakdown illustrated below), hence the unavoidable price hikes. Once the iPhones “Made in Brazil” begin to ship, Brazilians should see those sky-high price points drop. Foxconn had allegedly negotiated favorable tax breaks to open plant in Brazil and first iPhones reportedly began rolling from the assembly line in November. The Brazilian prices even beat those in India (44,500/50,900/57,500 Indian Rupees – or approximately $865/$990/$1,120 – for the 16/32/64GB iPhone 4S). This is interesting because in India, the 1.2 billion people market, a whopping 41.6 percent people live below the World Bank’s international poverty line of $1.25 a day.

Brazilian carrier Vivo is offering the device for R$ 1,249 (approximately $672) with a pricey plan. The 64GB unlocked iPhone 4S with a pre-paid plan sells for R$2,650, or about $1425. Shipping time on the online Brazil Apple Store is an estimated 1-2 weeks, same as in the United States at post time. Orders are limited to two per customer. Apple is also offering the popular iPhone 3GS which sells for R$ 1199, or about $705, while the 8GB iPhone 4 retails for R$1799 (approximately $1060), both unsubsidized.


This is why iPhone 4S made in China and imported into Brazil is overpriced: Taxes. Infographic by iG Economia.

As for Chile, iPhone 4S is now available via local retailers because Apple does not operate the official online store in the 16 million people market. According to Oh My Geek, an iPhone 4S with a plan costs about 409,990 Chilean pesos, or approximately $790 (opting for a pricier service helps bring the upfront payment down). Apple this week began offering the Apple TV in Brazil and iTunes Store with iTunes Match in Brazil, Chile, Latin America and other territories (lacking the Games section in Brazil). Brazil became the first BRIC nation (BRIC : Brazil, Russia, India, China) to get Apple’s set-top box. With population of over 192 million people, Brazil is a large market and the largest lusophone country in the world. With per-capita income of $12,422, Brazilians enjoy substantially higher income than their Indian counterparts who earn on average $3,703 a year.



(via 9to5mac)