Why the iPhone is more expensive in the Netherlands than in America
The iPhone 14 is beautiful, but it will cost you a rib. It is completely sour that you pay much more for Apple products in the Netherlands than in America. How come?
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3 reasons why the iPhone is more expensive in the Netherlands
When presenting new iPhones, Apple always shows the American prices. That is painful for the Dutch (and Europeans in general), because we have to pay much more.
For example, the brand new iPhone 14 in the United States costs ‘only’ 799 dollars, while we pay more than 1019 euros. We see the same with the iPhone 14 Pro. The best model of this year costs 999 dollars on the other side of the Atlantic, but in the Netherlands no less than 1329 euros.
In addition, Dutch prices have risen. For example, the iPhone 13, which came out last year, cost 909 euros and you had to pay 1159 euros for the iPhone 13 Pro. US prices, on the other hand, remained the same. The big question is: how is it possible that the iPhone is so much more expensive in the Netherlands than in America?
1. Inflation: Weak Euro, Strong Dollar
There are several reasons, but the main one has to do with currency: our currency is not doing well.
The exchange rate of the euro has fallen sharply in recent months, while the dollar exchange rate has started to improve. For example, in November 2021 you still got about 1.16 dollars for 1 euro, but last September that same euro was only worth 0.96 dollars.
How this is exactly is fodder for economists, but it certainly has to do with the fact that the euro has become less and less popular, while the demand for dollars has increased.
As our money is depreciating, many companies are raising their prices, including Apple. If this is not done, a bite is taken out of the profit margin and shareholders are of course not happy with that.
2. Production: The iPhone now costs more to make
We hope the corona pandemic is over, but the fact remains that the aftermath of the virus is still among us. Many companies suffered from production and transport problems during the pandemic and it simply takes (a lot of) time to solve them.
For example, in the run-up to the iPhone 14, Apple moved part of its supply chain from China to India because costs in President Xi Jinping’s country became too high. Also, more and more parts are made in the United States.
In addition, freight prices rose sharply, as did energy bills. Add to that a significant labor shortage and mounting political tensions and the calculation is clear: it is more expensive to make an iPhone now than it was a year ago.
This applies to both Dutch and American iPhones. It is therefore not entirely clear why the latter has not become more expensive. For this, Apple must provide openness in the financial books and show how the price of a device is structured. That will probably never happen.
3. Comparing apples to oranges
Finally, there is another very practical reason why the iPhone is more expensive in the Netherlands than in America: tax. Or rather, the lack thereof. In America, Apple touts the iPhone without including sales tax, similar to our VAT. The company does this because this tax varies by state.
For example, the sales tax in Louisiana, Tennessee and Alabama is relatively high (around 10 percent of the purchase price), while in Delaware, Montana and Oregon you pay no tax at all.
It should be noted here that these ‘tax-advantaged’ states are relatively sparsely populated. In other words, most US iPhone buyers just pay taxes.
However, they do pay less tax. The highest US VAT rate is 9.55 percent (Tennessee), while everyone in the Netherlands has to pay 21 percent. In addition, a private copying levy (à 7.30 euros) is added.
Conclusion: Why an iPhone is more expensive in the Netherlands
The large price difference between a Dutch and American iPhone is mainly due to the weak euro exchange rate. Our money is depreciating and because exchange rates fluctuate continuously, Apple converts dollar prices into euros with a wide margin.
Production costs have also risen sharply, partly due to the consequences of the corona pandemic, increased energy costs and political unrest. Finally, for a fair comparison, you should realize that you probably still have to pay taxes on an American iPhone.
