Canadians are accustomed to encountering higher price tags compared to their neighbors in the U.S., but the cost disparity for the latest iPhone has raised eyebrows. Apple’s new 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 $2,760 in Canadian dollars, resulting in Canadians paying nearly 10% more for the base model.
The significant price difference sparked ridicule and jests on a Canadian Reddit forum, with one user suggesting that individuals spending such amounts on a phone should undergo financial literacy training. Another user humorously pointed out that one used to be able to purchase a car for that price.
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, who are less sensitive to price variations compared to American consumers. Steinberg emphasized that while it is common for electronics and other products to be pricier in Canada, the exorbitant cost of this phone makes it particularly noteworthy.
Contrary to speculation, experts have clarified that Canada’s new retaliatory tariffs on U.S. products do not impact the iPhone Duo’s pricing. Despite smartphones being among the products subject to tariffs, Steinberg explained that Canada does not significantly import these devices from the U.S. Moreover, the iPhone Duo is manufactured in China, not the U.S., making it exempt from Canadian tariffs targeting U.S. goods.
Rising smartphone prices globally, including in Canada, are attributed to the ongoing microchip shortage caused by the surge in artificial intelligence and data center expansion, leading to increased manufacturing costs. Werner Antweiler, chair in international trade policy at the University of British Columbia, highlighted the prevalent practice of price discrimination by U.S. companies, citing the smaller Canadian market as a factor in paying slightly higher prices.
Apple has not responded to CBC News’ request for comments. Apple CEO John Ternus presented the iPhone Duo during the Wednesday event, marking a significant change to the company’s flagship product. Pre-orders for the Duo will commence on Oct. 17, with the phone becoming available on Oct. 23.