The US iPhone 5 Price Isn't Massively Cheaper Than Australia (And Other Importing Mistakes)

This is one of those things that seems to crop up with every iPhone launch, but just to be exceptionally clear; the US price for the iPhone 5 isn't magically "cheaper" than the Australian price. It's also not a very clever idea to import one from the States.

I saw this in quite a few comments on Lifehacker yesterday, as well as all over the Web generally, and via a few in-person conversations. It's pretty easy to see where the confusion crops up from. People watch the keynote — or just see a screengrab of US pricing — and then look at the locally announced pricing for the iPhone 5.

If you just took that on face value, then the US pricing is $199 for a 16GB iPhone 5, $299 for a 32GB or $399 for a 64GB model. Makes the $799/$899/$999 that we pay for an iPhone 5 look like the biggest ripoff possible, right?

Then again, at face value, the US iPhone 4 is "free". I'll take twelve!

The difference here is that (so far), Apple hasn't announced outright pricing for the US iPhone 5; those are all two-year contract prices that don't include the pricing for that contract. Apple lists those contract prices on its US web site; so far we don't have Australian contract pricing to exactly compare, but even a very rough translation of current iPhone 4S pricing shows the actual difference.

On AT&T's cheapest Individual Plan, a 64GB iPhone 5 would cost you $299 upfront, plus $59 per month (including data) over 24 months. That's $1715 in total with 300MB of data per month. Looking across the local carriers, Optus' cheapest 64GB iPhone 4S would cost you $1368 over 24 months with 200MB of data. At the time of writing, Vodafone wasn't listing the 64GB iPhone 4S on its web site (and it was out of stock of the 32GB version). Even Telstra's cheapest plan, which comes with 1GB of data — more than three times as much as AT&T's plan — comes out currently at $1848. Once you factor tax into the equation, there's either no difference, or it's actually cheaper and/or better value!

It's also worth noting that, just in case anyone was thinking that they could score a $299 US iPhone 5 and then simply not pay the contract, what with being in Australia, you'd be in for a bit of a shock there too — besides any interesting talks with lawyers, that is.

Despite all the talk of the iPhone 5 being a "world" LTE phone, there are actually three models; an LTE US model for AT&T in the States, a CDMA model for Verizon in the states, and then an LTE model for the rest of the world. We're getting the latter model here, and the US models won't be compatible with current Australian LTE frequencies. Sadly that also means that Australian iPhone 5 users who travel to the States won't see 4G LTE coverage there, although if you do roam onto AT&T it'll present itself as "4G" — but that's just HSPA+ under some fancy labelling. Just to ward off (some of) the Apple snarking, it's worth pointing out (as this Wired article does) that on the Android side of the fence, there's around nine different models of the Samsung Galaxy S III with the same kinds of network compatibility issues.

That doesn't mean you can't import an iPhone 5 from other parts of the world and save a few bucks; Kogan yesterday announced that it's taking pre-orders for the iPhone 5 and chopping $100 off the Apple Australia price doing so.


    Worst complainer I saw was Kochie (always a good start) on Sunrise, acting like we should protest because of the $199 US price.

      isn't he supposed to be some kind of financial guru?!

        Hahahahahahahah - financial guru - hahahahahahah

    Verizon selling full priced 16GB for $649.

      Got a link for that? Interesting, although again, it'd presumably be a CDMA-locked-Verizon iPhone. Not a whole lot of use here.

        yep and is

          Good stuff. So even with the GST factored in, there's still an Australia tax to bear -- but not the gulf of a gap that many had presumed.

            Prices in America don't have tax included, because I think it varies from state to state, so its easier to apply the rate (if any) to a product afterwards. What this tax is? I'm not exactly sure, but when I was visiting my brother in America last year I was considering buying an iPad there because it looked cheaper, but with tax factored in... you're right, it still was a bit cheaper and Australias do pay a premium but honestly it is such a miniscule amount.

        Straight from Apple

    Treating contract prices as total prices is a silly mistake for people to make, but the fact is buying from the US is cheaper for many things.

    I bought my (Android) phone, my laptop, my rowing machine, replacement parts for a 3.5 year old phone from the US, paid commission and postage to Australia for all, and still got them all (individually) at prices cheaper than Australia.

    So the Aussie iPhone 5 won't work with with true 4G LTE in the US? And the US iPhone 5 won't work with true 4G LTE in Australia?

    The US unlocked price for the 16GB is USD645 (press release after the show)
    Today’s conversion rate is 1.0582 Plus 10% GST gives a conversion to AUD 674.64

    Why are we asked to pay $799?????????

    that’s $124.36 PREMIUM

      only item's within australia have a GST unless the "imported" item cost more then 1,000 :)

    You are right there will be 3 models,however the cdma A1429 Verizon Sprint and KDDI Japan model, will support LTE Frequency 1 (2100) 3 ( 1800) 5 (850) 13 (700) 25 (1900). The GSM A1429 which is the global model supports LTE Frequency 1 (2100) 3 ( 1800) 5 (850) .Meaning the verizon sprint KDDI phone can work in Australia and other parts of the world.. It can not work in Canada, for LTE for that uses the same frequencey as ATT.

    Question though: I already have a sim only service contract with Telstra now and today I just placed an order to purchase the iPhone 5 outright on the Apple site, on there they are stating they are (GSM) will this utilise 4G if i use my Telstra sim? or should I cancel my pre-order and go through Telstra directly?

    I don't even like Apple or IPhones. This catches my eye because it is another prime example that the "strong" Australian economy is more to do with the bloated prices we are forced to pay for retail rather than any kind of political strategy. Our country is doing well because of WE the consumer (and our hip pockets), NOT because of the current government who, I am sure, would like to take all the credit.

      I agree Australia economy is doing well as long as there are some natural resources left underground to export.

    Keep in mind the $199/$299 etc iphones are network locked and will not work with any other network than specified at the time of purchase. (And all the carriers are American such as AT&T)


    You mentioned that "We’re getting the latter model here, and the US models won’t be compatible with current Australian LTE frequencies."

    From what I've been researching on the topic, the unlocked Verizon iPhone 5's will in fact
    work in Australia and be compatible with the LTE frequencies (the GSM version).

    It will also work here in Japan where I'm living. But I'm actually planning on moving to Brisbane next year and wonder if it's worth getting an unlocked US iPhone to bring to Australia. I would rather pay only US$850 vs. the AU$999 price (nearly 1:1 ex/rate) of an unlocked phone in Australia if I can.

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