Canadians are accustomed to seeing higher price tags compared to their counterparts in the U.S., but the cost disparity for the latest iPhone has caught many by surprise. 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 United States, prices start at $1,999, equivalent to approximately $2,760 in Canadian dollars, indicating that Canadians will have to shell out nearly 10 percent more for the base model.
The steep prices sparked criticism and humor on a Canadian Reddit forum, with one user suggesting that individuals spending such amounts on a phone should undergo financial literacy training. Another user pointed out that one could have purchased a car for the same price in the past.
According to University of Toronto economics professor Joseph Steinberg, the price increase likely reflects Apple’s understanding that the segment of the Canadian population interested in purchasing a “super-premium product” like the Duo is less sensitive to price compared to American consumers, allowing them to push profit margins higher. Steinberg noted that while it is not uncommon for electronics and other products to be pricier in Canada, the exorbitant cost of this particular phone makes it particularly noteworthy.
Speculation had arisen regarding whether Canada’s new retaliatory tariffs on U.S. goods would impact iPhone prices, but experts have clarified that this is not the case. Although smartphones are among the products subjected to tariffs, Canada does not significantly import these devices from the U.S. Additionally, the iPhone Duo is manufactured in China, meaning it is considered a Chinese product rather than a U.S. one for tariff purposes.
Werner Antweiler, chair in international trade policy at the University of British Columbia, explained that the global increase in smartphone prices is primarily due to the microchip shortage driven by the AI industry’s expansion and the proliferation of data centers. This surge in demand has led to higher manufacturing costs. Antweiler expressed surprise at Apple’s decision to raise prices more for Canadian consumers, but noted that U.S. companies commonly engage in price discrimination, with the Canadian market typically willing to pay a premium of 10 to 15 percent due to its smaller size.
Apple has not responded to CBC News’ request for comment. The unveiling of the iPhone Duo was led by Apple CEO John Ternus in his first event since assuming the leadership role, marking a significant shift in the company’s flagship product. Pre-orders for the Duo will commence on October 17, with the phone becoming available on October 23.