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Comment by murukesh_s | Hacker News Reader

I think iPhones can take a good bump in the pricing for bringing the manufacturing onshore. Currently an iPhone is 30% more expensive in developing countries like India compared to US, Dubai or even Japan. Thats insane, and still an average adult is looking forward to own one. That is 50% of your annual income you have to spend for buying an arguably, state of the art mobile phone. If you are in US, an iPhone is only approximately 1% of your annual per capita income. Thats massive difference..

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iPhones are more expensive in developing countries due to developing country taxes and tariffs. China used to be the same way (iPhones are imported into China because they are made in SEZs), but has a price that is comparable to the USA now mainly due to china’s push for more consumption by Chinese consumers. iPhone prices are high in India simply because the government would rather Indian consumers not spend money on them, not because the Indian government thinks they can afford it.

The USA is sort of addicted to consumption (where China wants to be actually), you could dissuade a lot of consumption by raising taxes on it (if, for example, you want people to save more and focus only on necessities). It would be a huge change for America though, the market might not survive intact if it happens too quickly.

Even if there are zero tariffs, the per capita difference is so huge. US was so far reaping the benefit of product made with labour from developing countries and consumers getting wages from developed country, making buying a new phone a rather insignificant portion of total yearly salary, however for a common man in developing country, owning an Apple device is sometimes equal to your yearly salary. So yea even if manufacturing moves to US and prices doubles, the consumers can absorb it.

Consumers won't absorb it, they will just buy less of it, like the common man in the developing country does. You don't just absorb higher prices, you re-prioritize your spending so that you still spend the same.

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