Apple to Sell IPhone at Costliest $1,174 in Brazilian Debut

Apple Inc. (AAPL) will open its first Latin America store tomorrow in Rio de Janeiro, featuring the highest-priced iPhone of all nations listed on its website.

Apple’s 16-gigabyte, contract-free iPhone 5s will sell for 2,799 reais ($1,174) in Brazil. That compares with $649 in the U.S. and 5,288 renminbi ($872) in China. The price of the iPhone 5s in Brazil, offered by authorized resellers, has jumped 17 percent since September on Apple’s website.

Brazil marks the 15th country where Apple operates its own stores. Having lost market share to rivals including Samsung Electronics Co., Apple is expanding into Latin America, driven by saturation in the U.S. and the desire for growth in one of the world’s biggest smartphone markets, according to Neil Mawston, director of global wireless practice for Strategy Analytics.

“The hype and shine around the Apple brand is not quite as strong as it was two or three years ago, so I wouldn’t expect as strong a buzz,” Mawston said by phone from London. “But it still should be quite an exciting launch for Apple, the country and the region as a whole.”

Apple shares fell by less than 0.1 percent to $544.06 at 2:29 p.m. New York time after hitting their highest intraday level since Jan. 27 earlier today.

The new outlet is at Multiplan Empreendimentos Imobiliarios SA (MULT3)’s VillageMall in Rio’s coastal Barra da Tijuca district, which will be the main stage for the 2016 Summer Olympics.

Smartphone Markets

 Brazil is one of the top 10 smartphone markets, with almost 50 million users at the end of 2013, according to Mawston. That’s 3 percent of the user base worldwide, and about double the number of users in Mexico.

 Apple may have been better off entering the Brazilian market a few years ago, before the economy began slowing, according to Carlos Thadeu de Freitas, chief economist at Brazil’s National Confederation for Commerce of Goods, Tourism and Services.

 “Even though we are at the end of the cycle of strong consumption, it’s still a favorable moment for Apple to open its store,” de Freitas said by phone from Rio. “There is demand for quality, and Apple is quality.”

 Apple declined to make an executive available for comment.

Economic Growth

Retail sales in Brazil, which have been a primary engine of economic growth, are showing signs of moderating. Sales rose 4.3 percent through 2013, down from 8.4 percent in 2012 and the slowest pace since 2003, according to the national statistics institute.

Gross domestic product will grow 2.05 percent this year after increasing 2.3 percent in 2013, according to the median estimate of analysts polled by Bloomberg.

Apple’s 16-gigabyte iPad2 with wireless in Brazil will sell for 1,349 reais ($566), versus $399 in the US.

“Over 50 percent of the people in countries like China and Brazil that are buying an iPad don’t own an Apple product,” Tim Cook, Apple’s Chief Executive Officer, said last February at the Goldman Sachs Technology and Internet Conference. “So this is a huge thing for us to go out and show people what Apple is, to introduce them to the company.”

Source: Bloomberg