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 The Math on Globe’s iPhone 4 Price

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PostSubject: The Math on Globe’s iPhone 4 Price   Mon Sep 20, 2010 8:38 am

So we finally got the official retail price of the iPhone 4 from Globe today and while the price point is within the expected range, it turns out it is more expensive by at least 12%. Here’s what we got from a little digging.The original no-contract price of the iPhone 3GS and iPhone 4 is $699 (32GB) in the US via AT&T (exclusive of taxes). When the iPhone 3GS was released with Globe Telecom last year, the prepaid price was Php42,250 (which includes taxes and some margins).



At that time (July 2009), the exchange rate was in the Php48 : $1, which makes it about $880 when converted back to dollars.

Today (September 2010), the exchange rates are a bit lower — Php43.9 : $1. Common sense would dictate the local Philippine price would have also gone down, right? Nope.

Turns out the 32GB iPhone 4 will retail for Php43,699. In today’s exchange rates, that amount is equivalent to a staggering $1,002! Had they followed the $880 intro price from last year, it would have been only Php38,600. A difference of Php5,100.A $1,002-dollar 32GB iPhone 4 translates to:

  • A +12% effective price increase from last year (price-corrected for forex rates).
  • A +43.2% price difference from the US no-contract price of $699.
  • A +13.2% difference from expected price and actual price.
Now, why would the price of the iPhone 4 in the Philippines gone up instead of down? Here are several possibilities:

  • Inflation might have been a factor but that’s just around 4% so it shouldn’t have been a huge one.
  • Inventory of remaining older units might have prevented Globe from pushing the prices down. If they adjusted the prices of the 3GS and 3G, they might not be making any profits from its sale. Maybe once the remaining inventories are all sold off, they can adjust the prices again.
  • Supply and Demand might also play a role here. From the looks of it, there’s high demand for iPhone 4 (same with SG and HK) and supply is limited.
The numbers above are just loose estimates but they represent a trend. I remember that a lot of people were complaining about the launch price of the iPhone 3GS before that Globe decided to slash the prices a week before the release date. Maybe they’ll surprise us again. Who knows?
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