How increased iPhone prices worldwide translate to hours worked
Apple is a US company and, as such, Apple announcements speak to their home audience. The rest of the world watches an Apple Keynote with the understanding that things like prices and availability won’t necessarily hold across borders. The different exchange rates create a variety of iPhone prices worldwide.
For example, Apple’s new upgrade program, where users can pay for an iPhone through monthly payments and have the option to upgrade after only a year, is only available to US residents. This move isn’t entirely surprising, as Sprint, Verizon, T-Mobile, and AT&T have introduced similar device financing and leasing programs.
Apple sells products globally— their pricing and, by extension, their affordability varies across countries.
The “context” here means not only staying competitive with major national retailers but also ensuring that profits generated abroad are consistent with those generated in the US. Most dramatically, in the past this has caused Apple to totally suspend online sales from Russia in 2014 when the ruble lost 30% of its value against the US dollar.
We wondered: what does higher prices mean for people on the ground? Wages and paycheques do not rise and fall like the value of a country’s dollar against that of the USD.
To help visualize how Apple’s pricing has affected consumers abroad, we looked at how many hours someone would have to work at minimum wage to purchase a new iPhone 6S Plus, 128GB, in their home country. Note: when doing the calculations for this graph, we included sales taxes in the price of the device.
So, interestingly, although the iPhone 6S Plus 128GB runs $1,457 CAD (vs. $1,044 USD) after tax, the average minimum wage in Canada is also higher than that in the US, meaning that Canadian buyers will work slightly less hours to afford a new device. Australia seems to be the promised land in this regard— Aussies only have to work 88 hours to afford a $1,529 AUD iPhone 6S Plus.
On the more cringe-worthy side of the spectrum, Spanish workers will spend 245 hours working at their €4.36 minimum wage to get the 128GB iPhone 6S Plus, priced at €1,069 after VAT. Singapore is the worst off with 269 hours. Although there isn’t an economy-wide minimum wage in Singapore, we used the $1,000 SGD per month nationally mandated minimum wage for cleaners as a benchmark.
While these numbers put into perspective how price changes affect actual consumers, it also underlines how inaccessible Apple products are to minimum-wage workers. As Apple increasingly relies on emerging markets for growth, we think it will be increasingly difficult to convince new customers to pay premium prices for the iPhone.