How much does an iPhone cost in Asia? Very affordable (compared to North America) [Update]

I was helping my mom consider whether or not to buy an iPhone in Macau, China, this afternoon and I was blown away by the cost differences for mobile services in Asia.

Here’s a quick comparison of the bottom-tier plans from Bell in Canada and 3 Mobile in Macau (I’ve converted Macau patacas at today’s rate of 0.128446).

Bell Canada 3 Mobile
iPhone 3GS (16 GB) Cost
$199.95
$408.49
Device status
Locked
Unlocked
Contract deposit (refunded monthly through contract)
$0
$210.65
Contract term
36 months
18 months
Plan Name
Combo 50
n/a
Monthly fee
$50.00
$24.15
Local calling (minutes)
100
200
Additional calling (per minute)
40¢
10¢
Additional same-network local calling (minutes)
0
300
Data (MB)
500
500
Additional data (per MB)
2.5¢
Text-messaging
15¢ each
unlimited
MMS messages
$2.50 each
10 included

Four things strike me about this:

  1. up-front costs are higher in Macau;
  2. you get an unlocked device in Macau;
  3. the contract term in Macau is only half as long as in Canada; and
  4. monthly fees are lower in Macau, but service levels are higher.

The “contract deposit” is an interesting phenomenon. My mom and I chatted about this and we figure that’s it’s a contractual defence again the cultural difference of a highly transient population in Asia. In Canada, (well, in North America in general, actually) that cost is somewhat hidden; it only applies if you try to exit a contract early.

In Macau (and perhaps other parts of Asia, I’m not sure) that’s the deposit that’s held to make sure you stay in the contract. And if you don’t, well, then it saves 3 Mobile having to chase you down to collect the fee.

To be honest, I’ve heard so many horror stories in Canada of people being bitten by that early-departure fee, I prefer this Asian way of collecting it up-front as a form of incentive to make you stay in the contract. Much more logical and open.

[Update] So my mom has reported that you get the contract deposit back in equal monthly portions over the term of the contract. So it is, in a sense, a permanent discount on the monthly fee. For the above plan, for example, you’d get $11.70 back every month, effectively dropping your monthly fee down to $12.45.

That’s $12.45 per month for an iPhone with 500 MB of monthly data, 20 minutes of talk time, and unlimited text messaging. Just let that sink in a minute.[/Update]

Just for fun, I also did a quick comparison of the highest-level device and plan from both companies.

Bell Canada 3 Mobile
iPhone 3GS (32 GB) Cost
$299.95
$100.19
Device status
Locked
Unlocked
Contract deposit (refunded monthly through contract)
$0
$621.68
Contract term
36 months
18 months
Plan Name
Combo 100
n/a
Monthly fee
$100.00
$63.97
Local calling (minutes)
500
1,400
Additional calling (per minute)
40¢
10¢
Additional same-network local calling (minutes)
0
800
Data (MB)
3 GB
unlimited
Additional data (per MB)
2.5¢
Text-messaging
unlimited
unlimited
MMS messages
unlimited
45 included

The cost-to-service-level ratio is just crazy here. [Update]And, once again, consider you’d get a monthly repayment of the contract deposit, effectively dropping your monthly fee to $29.43.

That’s $29.43 per month for the best iPhone (unlocked!) with unlimited monthly data, 1,400 minutes of talk time and unlimited text messaging. I’m drooling here, people.[/Update]

When things go truly out of whack, however, is when you look at the gross cost of the contract to the iPhone consumer.

At the low end, with the 16 GB iPhone 3GS, here’s how that compares.

Company Contract Total Cost
Bell $1,999.95
3 Mobile $843.19

And then on the high end, with the 32 GB iPhone 3GS, it’s really ugly.

Company Contract Total Cost
Bell $3,899.95
3 Mobile $1,251.65

That’s a huge difference. On the lowest-end iPhone contract, Bell is netting over $1,100 more than 3 Mobile. On the high end it’s over a $2,600 difference. These numbers almost make it worthwhile to fly over to Macau just to buy an unlocked phone so you can engage with Bell on a non-contractual basis.

Bell’s pricing is not atypical of other North American carriers. So it makes you wonder: what’s the fundamental economic difference that drives those North American carriers to charge so much more and push for such longer contracts?

As I wrote this my mom called and let me know she’d received about a $150 discount on the cost of the iPhone, plus a bottle of gin (WTF?!?!). It all makes me wish I were an Asian, rather than North American, iPhone user.

3 thoughts on “How much does an iPhone cost in Asia? Very affordable (compared to North America) [Update]

  1. “what’s the fundamental economic difference that drives those North American carriers to charge so much more and push for such longer contracts?”

    greed?

  2. I paid $600 in store for my iPhone. I’m locked into a three year contract with bell. I didn’t get a bottle of gin, but I got a free watch valued at $200 with my purchase at eric’s audiotronic.

  3. Wow that’s quite a contrast actually. I was aware that prices fluxuate between borders for a number of reasons and tax purposes but this goes to show that most of it really is added on extortion. Not needing to charge half as much as they do but it’s the power of supply and demand. As demand increases so does the price.

Comments are closed.