It’s been almost 5 days since carriers and stores opened at midnight and started to sell the new iPhones 5s and 5c in Brazil. And this is how long it took me to recover from the blow of the incredibly high, borderline offensive prices and disappointment in the entire situation.
Now Brazilians are used to the scenario. Video games, books, gadgets, computers, you name it, we have the most expensive prices for anything down here. News of this sort are as common as soccer scores to the point that they don’t even get that much attention anymore. However, just a few weeks ago the entire gaming community felt like they were being victims of a prank when Sony announced that the Playstation 4, which is being sold in the US for $400 would be sold for R$4000 (or U$1742) down here.
The PS4 is being referred to as PS4K now. People quickly did the math and found out that it is actually cheaper to fly to the US, buy it over there (hotel and food included) and come back with it rather than buy it here. And the rejection was so overwhelming that Sony underwent a press blitz to try and explain the prices, even breaking down financial information and blaming an old enemy of ours: taxes. However they weren’t very convincing, as the Xbox One starts at U$957, which is already an absurd price but became really cheap after the PS4 news.
So, back to the iPhone. We had been really excited, as for the first time we didn’t have to wait too much for the rollout. For the first time we’d have the new iPhones in November instead of December. But as the (unconfirmed) release date got closer, some scary information started to leak. First, the price table from Saraiva, a major retailer in Brazil. The prices for the unsubsidized 5c were U$871 for the 16 GB model and U$956 for the 32 GB. Meanwhile, the unsubsidized 5s would start at U$1174 for the 16 GB, then U$1261 for the 32 GB, and a whopping U$1348 for the 64 GB model.
Oh, before I forget, minimum wage here is U$295. Per month.
As the days went by, all sorts of prices began to hit the news. Some a little lower, some a little higher, but all of them around the same ballpark as the original Saraiva prices. A sense of disappointment began to take over. Even when the release date (which had been a rumor up until last monday) was finally confirmed, people were’t particularly excited about it anymore.
Then, one day before the release, carriers (which historically hold out on the prices until the last second) began to unveil their prices. And that’s when the real mess starts. Because in the US, things are way simpler than down here. You have 2 sets of prices. You have the on-contract price, and the off-contract price. And that’s it. Your service level or data plan has zero influence on the price of the device (thanks for the help, @jasonpbecker).
Here, however, things are a little different down here. You have 4 major carriers (TIM, Vivo, Claro and Oi), and they have an average of 6-8 different plans, ranging from around U$50 (60min of phone use, unlimited SMS, 2GB of data) to U$300 (where everything is unlimited). Now for each plan, from each carrier, iPhones have a different price.
Then came thursday. The big day. Only it didn’t really feel like the big day. If last year things felt a little cold, this year made last year feel like a blast. Traditionally carriers make big events in flagship stores inside malls with music, food and celebrities, as well as huge lines, and when the clock ticks midnight, sales officially begin, and unless you bought a phone within the next 12 hours, you were bound to wait a couple of months until you had a second chance.
This year however, lines were really short. Only the minority that hadn’t been put off by the prices decided to go check things out in person. Some went so they could see and hold the new models for the first time (keep in mind that we haven’t really seen that many around yet). Some went just to see with their own eyes if those were the actual prices. And some went still hoping to buy one, maybe knocking off a few hundred bucks with the help of all the accumulated points with their carrier relationship program.
I stayed home and followed on twitter as people tweeted their current situation. Up until that moment, Vivo (which is my carrier) was the only one who hand’t officially released the prices for the iPhone. And then we found out why.
You see, down here you can choose between a 1-year contract (remember the 6-8 different plans?) or a pre-paid no-contract line. Carriers tend to charge a lot more for the pre-paid, so people feel inclined to get a contract line. When Vivo unveiled the official off-contract iPhone 5s prices, they managed to turn the Playstation 4 into a great deal. The prices for the 5s were U$1481, U$1743 and U$1960, while the contract prices started at U$763 (5s 16 GB) on a U$159/mo plan.
At around 3am Apple unveiled the prices for unsubsidized iPhones 5s and 5c directly from the Apple Store website:
- 5c: U$871 and U$1046.
- 5s: U$1220, U$1394 and U$1568.
Notice how the 16 GB 5c and the 16 GB 5s prices don’t overlap. We are currently the only country in the world with this U$174 price difference between the two, as far as I know.
The next day I went to my carrier and decided to see how much a space gray 16 GB 5s would cost me, if I renewed my (expired) 1-yr contract and traded all my 39.000 points accumulated in these 4 years that I have been a client. Since LTE isn’t exactly a stable service yet, I decided to stick with my 3G plan. The dude from the carrier started typing on his computer, picked up a calculator, started typing over there as well, and I must confess that I started to feel a little hopeful.
He stopped fiddling with the keyboards looked up, made a dramatic pause (I swear), and said “U$1264“. I thought that he was joking. Only he wasn’t. Turns out that with my carrier, every 5.000 points you get an amazing U$6.50 discount on a new device, and renewing my 1-yr contract would give me $0 discount.
I left the store, and on my way to the car I realized that it would actually be cheaper to buy the unsubsidized iPhone from the Apple Store website instead of the iPhone from my own carrier, and renewing my contract for another year. How insane is that?
I really wish that this had been a different release. Not only this was the fastest rollout ever, but also for the first time retailers and even the Apple Store started selling the new iPhones from day one. Last year it took over 6 months for the Apple Store to start selling the iPhone 5. And this coordinated release might have a positive impact on sales. But I don’t really expect good sales numbers from down here. I looked up and asked around, and there isn’t a single place where any device or any model or capacity is sold out.
Instead of an exciting release that we are used to seeing all over the world and especially in the US, this year we were left with a weird release and an overall sense of powerlessness. It feels like the new iPhone isn’t for regular Apple users or even for early-adopters and tech users, but flat out for people who have got so much money, that ironically they won’t even know how much they paid for it. I was excited to get one, but as it is I guess that I’ll have to wait until I have the opportunity to bring it from the US, or maybe wait for the next version, if that takes too long. Talk about forward thinking.
It’s a shame. I was excited about it.