iPhone SE: How Much 'Australia Tax' Has Apple Tacked Onto The Price?

The new iPhone SE comes with the cheapest launch price of any iPhone yet, but that hasn't changed the pain Australians feel when we see the price we're expected to pay compared directly to the American price Apple executives announced on stage.

Photo: Getty Images

The iPhone SE will launch starting at $679 for the 16GB version in Australia — a fair bit more expensive than the American price of $US399 which, converted to Australian dollars, is just $526.

To be fair, the American figure doesn't include sales tax, while the Australian one does. So we should add 10 per cent GST on top of the American price for a more reasonable equivalent.

But that still only takes it to around $579 — $100 cheaper than the real Australian RRP.

Carry out the same sums with the more expensive 64GB version of the phone and you'll also find a difference of $105.

While the bulk of the shock in seeing a $399 price tag next to $679 is down to exchange rates and taxes, it's clear that Australians are still being asked to pay more than Americans for the new iPhone — a practice so well recognised in the consumer technology space it has spawned its own nickname: the 'Australia tax'.

Of course, the phrase is not entirely accurate — at least not in this case — because it's the same story in other territories as well. In the UK, where their currency has also fallen against the US dollar, the 16GB iPhone SE will cost the equivalent of $679 — the exact same price Australians pay.

A cynic might say that Apple is merely hiding behind the obfuscation of currency exchange to jack up prices and maximise profits outside its home market of the US. Yet the truth is likely more nuanced.

The company surely builds some amount of currency assurance into the price, for example. Since Apple makes its revenue in US dollars and can't go tinkering with the iPhone price every day to reflect the changing exchange rate, it wants to ensure a financial crisis doesn't have its Australian iPhones suddenly selling for significantly less than its American ones.

Another factor might be that Australians (and Brits) are simply willing to pay a little bit more for smartphones than Americans, and do so pretty much across the board. Average wages are higher here than in the US, after all.

By that same token, tighter rules and regulations here in Australia mean Apple undoubtedly has to pay the employees at its local Apple Stores a higher wage than it does its US retail workers, and it also probably spends more to comply with consumer guarantees

As for whether or not the size of the Australia tax is growing? It is. But again, it's all down to that pesky exchange rate.

iPhone vs exchange rate

Released Model Price (% diff to previous model) Currency movement (AUD to USD)
Sep 2015 iPhone 6s 23% -24%
Sep 2014 iPhone 6 0% 4%
Sep 2013 iPhone 5s 11% -13%
Sep 2012 iPhone 5 0% 5%
Sep 2012 iPhone 4s -8% 9%

While the price of iPhones in Australia has always been higher than in the US, the price increase from model to model — at least between the 4s in 2011 and the 6s in 2015 — has kept step almost exactly with the changes in the exchange rate.

It would be unfair to add the SE to this table. Owing to the fact that it's a mid-range product rather than a high-end one, there's not really anything to compare.


This article originally appeared in Digital Life, The Sydney Morning Herald's home for everything technology. Follow Digital Life on Facebook and Twitter.


Comments

    There are also supply and demand issues. How much more competitive is the US mobile market to ours? Aus has a very high smart phone uptake rate, the US I dunno about.

      I don't know, but with over 10 times the population base, I imagine competition is more fierce.

    Market share in Australia for apple products appears to be quite healthy which implies a willingness to spend the money one does on the product..... so it is reflective of what people will pay also.... and people will pay it.

    Just compared to Canadian Pricing and it's $579. 1 Cad to Aus is 1.01, 1 Cad to US is .76 and 1 Aus to US is .76 so their argument of currency exchange is way off.

    When I was first moving to Australia from Canada I was looking at getting a new Mac Computer and found out that I would save $150 on the big fancy 27" iMac if I bought in Aus because the sales tax was a little less here. So it doesn't seem consistent.

    Apple base our price on the uk price not the us one. 349 pounds equals about 655 dollars.

    Lol Australia tax when the dollar's below USD $0.75! Good one.

    So in other words, when you factor in exchange ($555 au) and add gst ($55.50 for $610 total) the iPhone Australian price, it costs more or less the same here as the US.

    Last edited 23/03/16 9:04 am

    So just buy one from the US, with no tax. Seriously, how is this (still) such a big sticking point?

    What's the price difference between an s7 here and the US? Could be a simple case of pricing near competitors.

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