The new iPhones overcharge UK consumers more than any previous model.

We have to pay almost £100 more here for the iPhone X than in the US.

Noi Rotstein

by , Insights & Marketing Executive

4 Sep 2017

The chart below shows how the UK iPhone prices compare to those of the US.

To allow for a direct comparison, the US price to buy each phone contract-free has been converted to pound sterling, with the exchange rate as it was at each handset’s release date, and recalculated to include UK VAT.

As you can see, the price has been consistently higher in the UK, with the exception of the iPhone 7.

Prior the announcement of 2017s new models, iPhones in the UK costed on average £36.40 more than in the US, although the iPhone 6s Plus was a whole £68 more expensive here.

The most recent announcements put these numbers to shame. Considering only the cheapest version of each phone, the iPhone 8 costs £69 more, the iPhone 8 Plus £79 more, and the iPhone X £99 more than in the US. These bring the average price difference up to £46.

For each year since 2011 up to 2016, we found the average difference between the US and UK prices of the iPhones released that year. Combining this with the estimated number of iPhones sold in the UK gives the extra amount British consumers have been spending in total. By our estimate, the UK has spent £1.1 billion more than if we’d been provided with the same prices as the USA. And this number is certain to go up significantly by the end of 2017.

YearAverage price differenceApproximate number of iPhones sold in the UKAmount extra spent
2011£6.023.2 million£19.3 million
2012£49.883.8 million£189.6 million
2013£59.754.5 million£268.9 million
2014£64.825.3 million£343.5 million
2015£26.236.4 million£167.9 million
2016£14.327.3 million£104.5 million
Total30.5 million£1.1 billion

Source: finder.com/uk, Statistica, Kantar, Gallup

These numbers also mean that fans of Apple who buy a new handset each year would have been rewarded for their loyalty with a bill £221 higher than their American equivalent. If they buy the iPhone X this year, that number becomes £320. And that’s assuming they stick to the base model of the phone, rather than going for the more expensive handsets with a higher memory capacity.

It’s questionable whether these steeper prices are justified. In the past Apple has blamed higher operating costs as the reason behind them, although this doesn’t explain how they managed to close the price gap with the iPhone 7.

Price difference by iPhone model

The discrepancy in cost has varied quite a lot between models. The table below shows the exact difference for each one.

ModelUK priceUS priceUS price in pounds with VATPrice difference
iPhone 4s£499$649£492.98£6.02
iPhone 5£529$649£479.12£49.88
iPhone 5c£469$549£411.75£57.25
iPhone 5s£549$649£486.75£62.25
iPhone 6£539$649£477.40£61.60
iPhone 6 Plus£619$749£550.96£68.04
iPhone 6s£539$649£513.23£25.77
iPhone 6s Plus£619$749£592.31£26.69
iPhone SE£359$399£333.01£25.99
iPhone 7£599$649£595.47£3.53
iPhone 7 Plus£719$769£705.57£13.43
iPhone 8£699$699£629.77£69.23
iPhone 8 Plus£799$799£719.87£79.13
iPhone X£999$999£900.06£98.94

Source: finder.com/uk, Statistica, Kantar, Gallup

Methodology
The US price was converted to pounds using the exchange rate provided by poundsterlinglive.com for the UK release date.The difference between the two gives the discrepancy – i.e. the amount more people were paying in the UK for the same phone.

The number of iPhones purchased was then estimated by finding the number of new iPhone users, and adding that to the number of existing iPhone users who would want an upgrade, each of which was estimated as follows:

Number of new iPhone users:

  1. The number of new smartphone users each year was found by multiplying the UK smartphone penetration (from Statistica) with that year’s UK population, as reported by the ONS, and subtracting from this the product of the smartphone penetration and the UK population of the previous year.
  2. This was then multiplied by the average market share of the iPhone that year, according to Kantar.

Number of existing iPhone users upgrading that year:

  1. The percentage of people upgrading to new iPhones every year was calculated from the results of a US Gallup poll.
  2. Responders had the option to select: a) when a new model is released, usually about every year, b) as soon as your cellphone provider allows it, usually every two years, c) only when it stops working or becomes totally obsolete.
  3. For option c), we approximated the average time for an iPhone to stop working as 3 years, as although iPhones can last longer, human error often causes them to break long before they die of natural causes.
  4. The percentage of people who responded a certain way was multiplied by one divided by the number of years (e.g. 51% of respondents selected 2 years = 0.51 x 1/2).
  5. This was completed for all three responses, and all were added together to determine the average number of years iPhone users take to upgrade.
  6. The number of iPhone users in a year, minus the number of new iPhone users gives the number of pre-existing iPhone users. This was then divided by the average number of years iPhone users take to upgrade gives the number of iPhone users upgrading that year.

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