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Why are Europeans paying more for their iPhones?

by Maine Bacos

Apple’s new range of phones, including the iPhone 15 Pro Max, are notorious for their hefty price tags. In the US, the iPhone 15 Pro Max is available for a staggering $1199. But how do these prices compare in Europe?

For buyers in the Eurozone, purchasing the top-of-the-range iPhone comes at an even higher cost than those in the US. When converted into euros, the price begins at €1131.74 on Apple’s US website. This marks a price increase of around 9% compared to last year’s version. However, this price hike also means that European consumers could potentially consider American buyers as having scored a bargain.

In European stores, the price of the iPhone 15 Pro Max varies between countries, but it generally remains significantly higher than in the US. In France, the starting price is €1,479, in Germany it’s €1,449, and in Italy, consumers will pay €1,489.

Even Apple’s less expensive phones experience a substantial price jump in Europe. In the US, the basic iPhone 15 sells at the equivalent of €754.18. Meanwhile, in France, it is priced at €969, in Germany at €949, and in Italy at €979.

However, before one jumps to the conclusion that it’s more budget-friendly to book a trip to the US, it’s important to examine these numbers closely. One key reason for the higher prices in Europe is that the value-added tax (VAT) is already included in the European figures. In contrast, additional fees are added after purchase in the US. The sales tax rates in the US vary from state to state, usually ranging from 2.9% to 7.25%. For instance, purchasing an iPhone 15 Pro Max in Washington, DC, with a sales tax of 6%, would result in an additional charge of $71.94 (€67.90) at the checkout. In Los Angeles, where the sales tax is particularly high, the additional charge would amount to $113.91 (€107.52).

Overall, customers in LA would save €239.74 compared to their counterparts in France when purchasing Apple’s most expensive phone.

It’s worth noting that the price disparity between the US and the EU isn’t limited to Apple’s new generation of products. In 2017, when the iPhone X was launched, Twitter users humorously suggested that it would be cheaper to fly to the US and buy the device there rather than purchasing it in Europe.

However, the reality is more complicated. When re-entering the EU with valuable items, you are legally obligated to pay customs duties. Traveling by plane or ship requires declaring goods over €430, while other modes of transportation have a threshold of €300. Returning from the US to France, customs duties on the iPhone 15 Pro Max would cost over €200, in addition to travel expenses, negating any initial savings.

Ultimately, the reasons behind Apple’s higher prices are not entirely clear. In 2016, the company acknowledged setting international prices based on various factors, such as currency exchange rates, local import laws, business practices, taxes, and the cost of doing business. These factors differ between regions and evolve over time, making international prices not always directly comparable to US suggested retail prices.

Although Apple’s higher prices may be attributed to covering additional operating charges, it hasn’t appeared to hinder the company’s success. iPhones account for roughly a quarter of smartphone sales in the EU, second only to Samsung models.

As inflation remains high in Europe, it remains to be seen how Apple’s dedicated consumer base will respond to the new range of products. Nevertheless, on a global scale, investment firm Wedbush has reported that pre-orders for the iPhone 15 range were 10% to 12% higher than expected, suggesting a potential shortage of the iPhone 15 Pro Max.

In conclusion, Apple’s new range of phones, including the iPhone 15 Pro Max, demonstrate the company’s penchant for high prices. Although European buyers face even steeper costs compared to their American counterparts, the inclusion of VAT in the European figures should be considered. Despite the price discrepancy, Apple continues to command a significant market share, leaving consumers eagerly awaiting the latest products.

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