There Is No Australia Tax On The iPhone 5s Or 5c

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.)

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