Canadians are accustomed to encountering higher prices compared to their American counterparts, but the cost disparity for the latest iPhone release 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 USD, equivalent to around $2,760 CAD, making Canadians pay nearly 10 percent more for the base model.
The price shock elicited criticism and humor on a Canadian Reddit forum, where users joked about the extravagant cost of the phone. University of Toronto economics professor Joseph Steinberg explained that the higher price in Canada reflects Apple’s recognition of a segment of the population willing to invest in a “super-premium product” like the Duo, suggesting they are less sensitive to pricing compared to American consumers. Steinberg highlighted that while it’s common for electronics to be pricier in Canada, the exorbitant cost of the iPhone Duo stands out.
Contrary to speculation, experts clarified that Canada’s new retaliatory tariffs on U.S. products do not impact the iPhone Duo’s pricing. Despite smartphones being included in the list of U.S. products subject to tariffs, the iPhone Duo is exempt as it is manufactured in China, not the U.S. The tariffs’ application depends on the product’s country of origin, not its last point of entry into Canada.
The surge in smartphone prices globally is attributed to the microchip shortage caused by the AI industry’s growth and expanding data centers, leading to increased manufacturing costs. Werner Antweiler from the University of British Columbia noted that while price discrimination by U.S. companies is not uncommon, the recent price hike for Canadian consumers by Apple is surprising. This practice is often justified by the smaller Canadian market’s willingness to pay slightly higher prices.
Apple has not responded to CBC News’ request for comment. The unveiling of the iPhone Duo was led by Apple CEO John Ternus, marking a significant shift in the company’s flagship product during his first event in the leadership role. Pre-orders for the Duo will commence on Oct. 17, with the phone becoming available on Oct. 23.