The iPad mini has finally arrived in Brazil — hooray!
Well, Brazilians are not so excited about it — not just because it is eight months late, but also because the iPad mini sold here is arguably the priciest in the world.
Since yesterday (June 25), the most basic version of the little tablet (Wi-Fi, 16GB) is retailing for R$1,300 ($590,90) on Apple's website. Mobile operators are selling the 3G devices with data plans for similarly high prices: The 16GB version is sold for R$1,800 ($818.18) to prepaid customers by Claro, one of the main operators in the country — the pay monthly option retails for R$1,350 ($613.63).
A quick search online shows that at $590.90, the most basic flavor of the iPad mini in Brazil, costs way more than in countries such as Denmark ($456.10) , Finland ($447.70), Singapore ($353.26), the UK ($414.55), and the US ($329).
Why is it so expensive?
According to news agency G1, the value of the iPad mini is $272 when it arrives in Brazil. About three different import and national taxes are applied at that stage. Add to that margins for all the parties involved in the supply chain — from Apple to the final retailer — and presto, you have one hell of a pricey device.
Apple manufacturer Foxconn has a production facility in Brazil, but the iPad mini, as well as other components for the production of Apple tablets and mobile phones, are all imported.
According to São Paulo-based technology consultancy IT Data, tablet manufacturers seeking tax incentives in Brazil must meet some requirements in order to get exemption of certain taxes, which would typically mean a hit to the company of about 12 to 15 percent.
"However, this implies that you will import some components and buy parts produced in Brazil, too. One of the reasons that prevent local production is sometimes the process as a whole. It is only worthwhile to produce locally if the amount is significant," said Ivair Rodrigues, research director at IT Data.
"I believe that the iPad mini can be produced locally if the sales volume justifies that — and at the moment, that is still not the case," he added.
Also according to IT Data, about 8.7 million tablets will be sold in Brazil in 2013 — about 186 percent up in relation to 2012 numbers.
Why did it take so long?
Brazilian telecommunications agency Anatel is also responsible for the homologation of telephony equipment, including mobile devices — in simple terms, this means Apple would not be able to sell the iPad mini, for example, if the device had not been scrutinized and approved by the agency beforehand.
The process is supposedly intended to ensure that devices are compatible with the technologies adopted in Brazil and meet technical requirements as well as appropriate policies in terms of warranty, service, and quality. It can take months from the moment Anatel authorizes a device until it actually hits the high street.
There have been occasions where other bodies get in the way. Last year, tax and border authorities were stopping iPhone 5 devices purchased by Brazilians from overseas websites from entering the country — the reason at the time being the origin of the equipment (China) and the associated doubts over its authenticity.