I want to get in and say this before the complaining starts: the pricing models for the new iPhone 5s and iPhone 5c are very different in Australia to those that apply in the US. Comparing them is meaningless.
Picture: Getty Images
Below is a table showing the launch prices for the new models announced by Apple today, for both Australia and the US:
Model | $AU price | $US price |
---|---|---|
iPhone 5s 16GB | $869 | $199 |
iPhone 5s 32GB | $999 | $299 |
iPhone 5s 64GB | $1129 | $399 |
iPhone 5c 16GB | $739 | $99 |
iPhone 5c 32GB | $869 | $199 |
iPhone 4S 8GB | $529 | Free |
There are two reasons why you can’t compare these prices directly, even leaving aside currency conversion. Firstly, the Australian prices include GST, while the US prices don’t include state taxes. These vary, but you can assume a 10 per cent difference as a general rule of thumb.
[related title=”JUST THE FACTS” tag=”iphone5s5c” items=”1″]More importantly: the Australian price is an outright buy price for the phone, while the US price highlighted in the announcement event (and the press releases) is merely a part payment on a contract phone locked to a specific network. You also have to sign up for a two-year plan, which may include additional handset subsidies.
So the two numbers don’t represent the same thing. A US buyer can’t pay $99 for a 16GB 5C and just walk out of the store and use whatever carrier they like. Even the ‘free’ 8GB 4S requires a contract. In this respect, Australian iPhone owners are massively better off than our US siblings, and always have been. We can either pay outright, buy the phone on a cheap contract plan with monthly subsidies, or buy it on a higher-priced contract plan with no additional charges.
While there are ‘contract-free’ iPhones sold through T-Mobile in the US, these don’t include LTE support, which means no 4G. That doesn’t make for a very meaningful comparison either. But if we took the cheapest 16GB 5S at $US649, did a currency conversion then added GST, we’d end up with a price of around $770. So that’s a slightly cheaper phone, but one with inferior specs.
Once the Australian plans for iPhone 5s and 5c buyers on contract are announced, we might be able to perform some kind of more meaningful comparison of costs, but even then we’d have to factor in call costs, data allowances and other tweaks. (In the US, for instance, the ability to tether usually attracts separate charges, which isn’t the case in Australia.)
I don’t want to pretend the iPhone 5s is a cheap phone, and even the 5c costs a lot more than many bargain Android phones. But when comparing prices, you shouldn’t compare apples with oranges. (Also, the 5c doesn’t come in orange.)
Comments
32 responses to “There Is No Australia Tax On The iPhone 5s Or 5c”
I’d totally forgotten this from the past five launches (not including iphone 1). Thanks!
Your message would get across a lot clearer if you put the US$ outright costs in the table instead of the contract price. I fully realise the article is about not interpreting your table as a direct comparison, but ultimately its still tables like that which is causing the confusion to begin with. At the very least a ‘off contract US$’ column would make sense even if the capabilities are slightly different.
The point is you can’t buy the phones off contract in the US.
You can, the prices and listing are here: http://store.apple.com/us/buy-iphone/iphone5s (“Unlocked and Contract Free – T Mobile”)
There might be some slight spec differences, but it’d make more sense putting those prices into a graphic than the contract price.
You can walk into an Apple store in the US and buy an iPhone off contact. I did it with 4S in LA and have the phone and receipt to prove it.
What is the point of the the 5c? Its not cheap and there is also 5s for $130 more. Why didn’t they just continue with 5 and make a real cheap iphone?
They figure they can make more money by calling it a 5C and charging more for it.
This was the nail in the coffin for me and iOS, i’ve been debating it for years, but now im certain my iPhone 4 was my first and last iPhone, when it finally dies (wont be long now, going by the slowness and number of crashes) ill upgrade to Android or WinPhone (though not until WinPhone gets a notification center).
The iPhone 5 was not worth the upgrade and the addition of a fingerprint scanner doesn’t make it any more worthy, and even less worthy at $1200 (32gig is not enough me these days i can get an S4 32GB and a 32g sdcard for around 60% of that).
totally agreed. they introduce the 5c as the cheaper option especially to survive in Asian market . don’t know how a $739 phone is called cheap…strange…!!!
The t-mobile iPhones sold outright in the US do indeed support LTE. I know, I own one. It does not, however, support the LTE bands used here, with the 5 the Verizon one did (but to get that outright you had to go to a retail store), with the 5c/5s the verizon model & the AU model do different bands.
Apple’s site makes it quite clear that the outright 5S through T-Mobile does not offer LTE.
Incorrect, Angus. Apple’s site makes it quite clear that the outright 5S through T-Mobile does offer LTE.
http://www.apple.com/iphone/LTE/
Also, the table above should compare the outright prices for US and AU rather than the outright AU price with the contract US price.
AU$869 vs. US$649 and AU$1129 vs. US$849 sure looks like an Australia Tax to me.
That page refers to the contract phones. Let’s see what the 5s sale page says:
http://store.apple.com/us/buy-iphone/iphone5s
“The unlocked iPhone 5s model is A1533 (GSM).”
And how about the 5c?
http://store.apple.com/us/buy-iphone/iphone5c
The unlocked iPhone 5c model is A1532 (GSM).
…and “T-Mobile” is listed under “Supported LTE Networks” for these models.
Also see this
http://www.apple.com/iphone-5s/specs/
“Model A1533 (GSM)*: UMTS/HSPA+/DC-HSDPA (850, 900, 1700/2100, 1900, 2100 MHz); GSM/EDGE (850, 900, 1800, 1900 MHz); LTE (Bands 1, 2, 3, 4, 5, 8, 13, 17, 19, 20, 25)”
………. there’s a difference between the device itself actually capable (supports) of the LTE network…. and the cell provider to actually OFFER that particular LTE network service to you. so your device can have all the capability for all you care.. but if the network doesn’t offer it to you … -_____-
As others have pointed out there every model of the iPhone that ships with LTE support. They say A1533 (GSM) to differentiate from the A1533 (CDMA) (the Verizon model, which also supports LTE).
Glad you got in and explained it all before the serial complainers wake up
What I don’t understand is that ‘usually’ the pricing in Australia for any new iPhone is as follows;
64GB – $999
32GB – $899
16GB – $799
(Not taking into account the fact 2 new phones are being released here)
I don’t understand why this time around, it’s suddenly more expensive just because they’ve changed the colours and added a fingerprint scanner
On a side note, whilst on the apple website, I see they’ve perhaps discontinued the iPhone 5 leaving only the 5S, 5C and 4S
Its more expensive as the Aussie dollar is now weaker compared to the last couple of years.
Yeah, taking into account current conversion rates and our 10% GST, an equivalent price for the US$849 64Gb model is about AUD$1,004 (give or take). That means the actual price of AU$1,129 is an additional 12% on the direct conversion price with the current conversion rate.
Ok outright through T-mobile prices are (taken from US Apple Store)
16GB iPhone 5S $649 US
32GB iPhone 5S $749 US
64GB iPhone 5S $829 US
16GB iPhone 5C $549 US
32GB iPhone 5C $629 US
So
$549 US x US to AU exchange rate + 10% GST = $648.54 AU
$649 US x US to AU exchange rate + 10% GST = $766.67 AU
$749 US x US to AU exchange rate + 10% GST = $884.80 AU
$849 US x US to AU exchange rate + 10% GST = $1002.93 AU
NOTE: based on an exchange rate of 1.07392 US$ to AU$ from http://www.xe.com/ucc
Outright Australian prices from Apple (taken from AU Apple Store), all include GST.
16GB iPhone 5S $869 AU
32GB iPhone 5S $999 AU
64GB iPhone 5S $1129 AU
16GB iPhone 5C $739 AU
32GB iPhone 5C $869 AU
So the price difference (call it what you want) is
$102.33 on the 16GB iPhone 5S or 12%
$114.20 on the 32GB iPhone 5S or 11%
$126.07 on the 64GB iPhone 5S or 11%
$90.46 on the 16GB iPhone 5C or 12%
$102.33 on the 32GB iPhone 5C or 12%
Similar story for the cases (almost)
iPhone 5S case is $39 US and $48 AU, so 4% difference (once converted to AU + 10% GST)
iPhone 5C case is $29 US and $39 AU, so 12% difference (once converted to AU + 10% GST)
and that extra 11/12% we’re paying is the basic equivalent of the state sales tax in america, which, depending on the state you’re in, is generally between 10 & 15%. and there is no bank in the world that would use the xe.com exchange rate for their conversions – the bank always makes a couple of extra cents per dollar on the exchange rate – check out the conversion rates on paypal if you want a more realistic conversion
so, same-same
The prices listed on the US store are not inclusive of their state tax and the state tax should not be included in any conversion to AU dollars. We aren’t talking about buying the device in a particular state in the US rather taking the pre-tax price as a point of reference for the price Apple charges for the device around the world.
The prices listed on the AU store are inclusive of the Australian GST and hence should be included in any conversion.
So
AU price = (US price x Conversion Rate) + 10% GST
Not
AU price = ((US price + US state sales tax) x Conversion Rate) + 10% GST
Otherwise you are calculating tax twice.
Also I never claimed that xe.com conversion rate was anything other than their listed conversion rate which was used in my calculations as an example, of course individual financial institutions will tweak the conversion rates to make a few dollars themselves. That isn’t relevant to conversation.
I’m not sure you could dismiss the US sales tax out of hand, as it will have a significant influence in how Apple sets their price point.
In much the same way that waitressing jobs take into account the tips they may make (and thus their wages are lower), Apple would have factored in the sales tax, and drop their price point accordingly.
However, as they can’t do a state by state price, what we see is a nationwide price, and those who live in areas that don’t have a sales tax, get it cheaper – in theory anyway.
That’s why why most of the iPhone sales are through carriers, as it is the ‘Great Equaliser’ , otherwise you’d find that everyone would buy their iPhone from Oregon.
As for the conversion rate, you would have to factor in the banks levy, unless the comparison is purely for statistical purposes
Yep, this is pretty much right, although I thought the avg. sales tax across the states was closer to maybe 7%-8%?
Apple hardware (unlike iTunes) is probably one of the few things that is evenly priced across AU/US but saying it was unfair to compare the outright purchase prices in the US and AU because of hardware differences was just incorrect.
In any case I’ll be picking up a Lumia 925 for $430 in the next couple of days 🙂
Consumer bank fees are largely irrelevant to corporate currency exchange, and Paypal is particularly notorious for overcharging for currency conversions. Neither of them are useful for comparing corporate exchange rates. But even with that said, this isn’t a currency exchange, it’s a price valuation. Money goes to the AU Apple branch and only gets converted back to USD a few times a year, if not once, and it’s done in bulk for very marginal fees. The exchange rate is much closer to the actual rate companies use when converting currency between branches in bulk, not Paypal or your bank calculator.
No, the 10% GST he already added to the price is the equivalent of sales tax in the US. This is a pretty simple calculation that you can approach from two different directions:
What the consumer pays:
– The average US sales tax is 8%, which means the base 5S model costs the average American $700 USD.
– The Australian price is $869 AUD, which are currency conversion becomes $811 USD.
– The price difference is $111 USD, meaning Australian consumers pay 16% more than American consumers.
Importing a foreign product:
– The US price without sales tax is $649 USD. Sales tax only applies to local sales, so it’s not added to exports.
– After currency conversion, this makes the unit price $695 AUD.
– Adding 10% GST to that price brings it up to $765 AUD.
– Another $104 AUD is inexplicably added to the price, which is a 13.6% increase in price without explanation.
The phones are manufactured in China and both the US and Australia receive their shipments from China directly, so there are no additional shipping fees to get the devices here. So what is the extra 13-16% paying for, exactly? The above should make it pretty clear it’s not sales tax.
I performed the same calculations based on the UK Apple Store prices which indicate the amount of VAT applied (which appears to be around 16.75%)
So to calculate the AU price it was
AU price = ((UK price – declared VAT) x Conversion Rate) + 10% GST
Conversion rate was again from xe.com and was 1.69052
16GB iPhone 5C works out to be $725.23 AU (2% difference for $739 AU retail price)
32GB iPhone 5C works out to be $849.82 AU (2% difference for $869 AU retail price)
16GB iPhone 5C works out to be $849.82 AU (2% difference for $869 AU retail price)
32GB iPhone 5C works out to be $974.41 AU (2% difference for $999 AU retail price)
64GB iPhone 5C works out to be $1097.15 AU (3% difference for $1129 AU retail price)
So compared to the UK not so bad…
VAT might appear to be 16.75% i the UK, but it’s actually 20%. So the AU pricing differential is a little higher than your figures.
Obviously the most “correct” US price to use for those who are interested in buying overseas would be the list price not including sales tax, because really, why would you willingly pay more than you had to?
Just purchase it in, or from, a state with no sales tax.
IPhone prices are crazy. I just bought an unlocked Samsung 4G for less than $600.
Just wanted everyone to know. Dick Smith is planning on flogging 5s and 5c in limited iPhone stores on launch day. Both unlocked and with their Think Mobile. For reference, they will allow you to buy a 16gb on the unlimited 59.95 cap for $182 upfront. If you want to do that, get into a store and run the post paid application now, get approved and just hold in there for launch day.
I don’t care about the comparison.
Just the fact the Apple are a bunch of tight arse greedy sods who overcharge for their tech- forcing us into contracts we don’t want just so we can have their overpriced phones!!!
In the consumer market, who is forcing you to buy their products?
My disagreeace is based on what others have already said about even when comparing the price of unlocked GSM phone from USA with here we are being ripped. But also the $130 price differences for each storage. In the US they are $100 which would be about $119 here when adjusted for exchange rate and GST.
Hi can anybody tell me the online or business address I can visit to get one of the above prices for an iphone 5s 64gb $399 USA? Would love to get my hands on one this cheap. Chris.