Canadians have been accustomed to encountering higher price tags compared to their American counterparts; however, the cost disparity for the latest iPhone has raised eyebrows. Apple’s latest 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 US, equivalent to about $2,760 in Canadian dollars, resulting in nearly a 10% premium for the base model in Canada.
The substantial price hike sparked criticism and humor on a Canadian Reddit forum, with one user suggesting that individuals willing to pay such amounts for a phone should undergo financial literacy classes. Another user humorously remarked that one could have purchased a car for the same price in the past.
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, showing less sensitivity to price compared to American consumers, thus justifying a higher profit margin. While it is common for electronics and other items to be pricier in Canada, the exceptionally high cost of the iPhone Duo stands out.
Contrary to speculation, experts have clarified that Canada’s new retaliatory tariffs on U.S. products have not impacted iPhone prices. Although smartphones are among the U.S. products subject to a 50% tariff, Canada does not substantially import smartphones from the U.S., and the iPhone Duo, being manufactured in China, is not affected by Canadian tariffs on 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 fueled by the AI industry’s growth and the proliferation of data centers, leading to heightened manufacturing costs. While surprised by Apple’s specific price hike for Canadian consumers, Antweiler notes that U.S. companies often engage in price discrimination, as the Canadian market typically accepts paying 10 to 15% more due to its smaller size.
Apple has not responded to CBC News for comment. Apple CEO John Ternus presented the iPhone Duo during the launch event, marking a significant shift in the company’s flagship product under his leadership. Pre-orders for the Duo will commence on October 17, with the phone becoming available on October 23.