Canadians are accustomed to encountering higher price tags compared to their U.S. counterparts, but the cost disparity for the latest iPhone model 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 before taxes. In the U.S., prices start at $1,999, equivalent to approximately $2,760 in Canadian dollars, resulting in nearly a 10 percent price difference for the base model in Canada.
The steep prices elicited criticism and humor on a Canadian Reddit forum, with one user suggesting that individuals spending such amounts on a phone should undergo financial literacy education. Another user pointed out that the cost could have previously bought a car.
University of Toronto economics professor Joseph Steinberg believes that the price increase indicates Apple’s recognition of a segment of the Canadian population willing to purchase a “super-premium product” like the Duo, showing less sensitivity to price compared to American consumers, allowing for a higher profit margin. Steinberg notes that while it is common for electronics and other products to be pricier in Canada, the exorbitant cost of the iPhone Duo stands out.
Contrary to speculation, experts have clarified that Canada’s new retaliatory tariffs on U.S. goods do not impact iPhone prices. Although smartphones are included in the list of U.S. products subject to tariffs, Canada primarily does not import these devices from the U.S. in significant quantities. Moreover, the iPhone Duo, manufactured in China, is not affected by the tariffs as it is considered a product originating from China, not the U.S.
The escalating prices of smartphones worldwide are attributed to the global microchip shortage caused by the AI industry’s expansion and the proliferation of data centers. This surge in demand is driving up manufacturing costs. While Apple’s decision to raise prices for Canadian consumers is surprising to some, it is not uncommon for U.S. companies to engage in price discrimination, with Canadian markets typically willing to pay 10 to 15 percent more due to the country’s smaller market size.
Apple has not responded to CBC News’ request for comment. The unveiling of the iPhone Duo was led by Apple CEO John Ternus in his first major event since assuming the leadership role. Pre-orders for the Duo will commence on October 17, with the phone becoming available on October 23.