Apple prices skyrocket in Brazil

Cost of devices goes up by 10 percent on average due to the volatility of the real
Written by Angelica Mari, Contributing Writer

Straight after Christmas, Apple has increased the price of its products in Brazil by an average of 10 percent.

Products such as the iPhone 5S 16GB went from R$2.200 ($825) to R$ 2,500 ($938), so a 13.6 percent hike, while the iPhone 6 Plus of 128GB went from R$ 4.400 ($1.651) to R$ 4.700 ($1.763), up 6.81 percent.

By comparison, US prices for the iPhone 5S and 6 Plus of the same spec are $99 and $499, respectively.

Apple has its manufacturer Foxconn making some of its products in Brazil with government incentives, but the price hike is generally attributed to the volatility of the local currency, the real, which has been falling rapidly against the dollar over the last few months.

According to Ivair Rodrigues at analyst firm IT Data, the price increase is "inevitable" and that the steady devaluation of the real since the release of the iPhone 6 and 6 Plus models in Brazil in November means the price hike was going to happen sooner rather than later.

"Some Apple devices sold in Brazil such as the iPhone 6 are not produced locally and are 100 percent imported. Back when these products were launched, one dollar was worth about R$ 2,30 and now it has increased to almost R$2,70," says Rodrigues.

"So Apple prices for the imported items are unsurprisingly going up for retailers and final consumers - and that's also the case for other smartphone makers selling imported goods in Brazil," he adds.

"However, it is also worth observing that ever since Apple launched the iPhone 6 and 6 Plus in Brazil, the items they have imported have flown off the shelves. So obviously there are Brazilians who are willing to spend a lot on a device."

Even before the increase, Apple's prices in Brazil were already the highest in the world, followed by Turkey and Italy. The company did not respond to requests for comment on the price increases.

Apple has also told developers it's raising App Store prices across Europe, Canada, and Russia in response to new tax laws and changes in foreign exchange rates.

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