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Why new iPhones cost less in UAE than in India, UK and France

Dubai - Higher tax rates, logistics and other factors considered to maintain profit margin

The iPhone is one of the most sought-after gadgets as every new launch witnesses long queues in Dubai. The latest variants were also one of the hottest-selling at Gitex Shopper, not just for residents, but also even for a large number of visitors from the Indian Subcontinent and Africa, who buy Apple's devices during their visit to Dubai as they are priced less in the UAE than most other markets.
When prices of Apple's new devices are compared, we find that that they are cheaper in the UAE than in India, the UK and France. But it is costlier to buy here than in the US, China and Japan.
When prices given on Apple's website for each country are compared, it was revealed that the iPhone 11 Pro and iPhone 11 are 23 per cent and 14 per cent more expensive in India than in the UAE, respectively.
But if the iPhone Pro 11 and iPhone 11 are bought from the UK, UAE residents will have to pay 14 per cent and 13 per cent more, respectively.
Anurag Chaturvedi, managing partner at Chartered House Tax Consultancy, says higher tax rates in India and the UK are definitely factors for higher prices in these countries. Like all major companies with a global reach, Apple has its own pricing policies also that differ from market to market. Another factor that influences iPhone prices is currency fluctuations.
But buying an iPhone 11 Pro is 13 per cent cheaper in the US and 13.5 per cent in Japan than in the UAE.
Chaturvedi finds logistics as one of the factors.
"Let me explain how it works. As per a report by the Wall Street Journal, the iPhone is so expensive in India because in the Indian market, where Apple has no manufacturing unit within the country and cannot have its own brand store as they cannot avail FDI in single brand retail, it forces them to collaborate with Indian retail agencies, which results in four to five middlemen before the product reaches final consumers," he points out.
"Each middleman takes a chunk, meaning that to maintain profit margins, Apple has to increase the price. Apart from custom duties, various taxes and depreciation of currency, logistics is the reason why the iPhone is cheaper in the US and Japan," explains Chaturvedi.
Apple never marketed the iPhone as cheaper handsets, he said, adding that "from the beginning it has an image of a luxury and exclusivity. So, yes in my personal opinion to maintain this image they do price their product at a high price."
- waheedabbas@khaleejtimes.com