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iPhone price rises because of exchange rate and chip cost, says economist

iPhone price rises because of exchange rate and chip cost, says economist

Apple launched its new line of iPhones last week, with prices reaching R$ 15,499 in Brazil in the most advanced versions. According to XP economist Tatiana Nogueira, these values ​​have risen over the years due to internal and external factors in the production of the devices.

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iPhone 14 Pro Max 1TB costs R$15,999 (Image: Disclosure/Apple)

She points out some of the main costs that define the price of smartphones: costs of semiconductors and electronic components, support inputs, taxes in force for each country and the exchange rate in relation to the dollar. Variations in these factors caused the final value to rise by 171%, compared to the 2008 iPhone 3G — from R$2,800 to R$7,600 in the base model each year.

Pandemic affected chip availability

iPhone price rises because of exchange rate and chip cost
Component prices rose during the pandemic, following a downward trend (Image: XP)

The semiconductor market situation has had quite large fluctuations over the last few months, especially due to the covid-19 pandemic. As a result, Apple had an expansion of up to 25% in spending on raw materials, reversing a downward trend that followed until 2019.

Some facts explain this increase in the final price: first, the lockdown policies increased the demand for electronic devices, for online classes and conferences, among other uses.

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On the supply side, factories were temporarily closed due to the health crisis, which was harmful due to the intense need for manpower. The situation is aggravated by the fact that semiconductor production is very concentrated, with only three companies on the planet capable of producing highly complex chips.

Taxes and exchange

1663331527 618 iPhone price rises because of exchange rate and chip cost
Dollar has seen big increase in the last decade (Image: XP)

Other factors considered by Tatiana Nogueira include national taxes. Taxes under federal jurisdiction, such as taxes on imports and IPI (Imposto sobre Produtos Industrializados), reach 14.87%, while ICMS (Imposto sobre Circulação de Mercadorias e Serviços) is 8.37% — not counting taxes. states, which are at an average of 17%.

Exchange volatility is also largely to blame for the rise in prices, as the value of the dollar has gone from just under 2 reais to more than 5 reais since 2008. The increase in 2020 stands out, when the currency rose almost R$ 1.00 in relation to the previous level.

“The stability in the official sales price observed between 2010 and 2016 was not enough to avoid the positive variation for the Brazilian consumer, who had their purchasing power in dollars deteriorated in the period”, concluded Tatiana.

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