Apple opens its first South American store in Rio de Janeiro

Import taxes costly as Apple's first South American store opens in Brazil

PUBLISHED : Monday, 17 February, 2014, 5:17am
UPDATED : Monday, 17 February, 2014, 6:40am

Nearly 1,700 impatient shoppers queued for hours for the grand opening of Apple's store in Rio de Janeiro, the first official outpost in South America and the most expensive place in the world to buy an iPhone.

Apple's 16-gigabyte, contract-free iPhone 5s will sell at the store for 2,799 reals (HK$9,017) in Brazil. That compares with US$649 (HK$5,033)in the United States, HK$5,588 in Hong Kong and 5,288 yuan (HK$6,721) in China.

The price of the iPhone 5s in Brazil, offered by authorised resellers, has jumped 17 per cent since September on Apple's website.

Part of the reason the products are so expensive is high import taxes in Brazil. An iPad Air that costs US$499 in the US, sells for more than US$700 in Brazil.

First in line on Saturday was Thiago Cuba, 31, who said he was looking forward to shopping at the new store in an upper-class section of Rio, even though he was experiencing sticker shock.

Apple prices in Brazil "continue to be very high" but were coming down gradually, Cuba told the O Globo newspaper.

"There are some [Apple products] here that are close to what they would cost in dollars," Cuba said, as he prepared to pay for a new printer, headphones, and some mobile-phone cases.

"I expect that the prices will fall, but the quality of the products is worth it."

The new Apple outlet is at Multiplan VillageMall in Rio's coastal Barra da Tijuca district, which will be the main stage for the 2016 Olympics.

It makes Brazil the 15th country where Apple operates its own stores.

Having lost market share to rivals including Samsung, Apple is expanding into Latin America, driven by saturation in the US 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. "But it still should be quite an exciting launch for Apple, the country and the region as a whole."

Apple officials said they were delighted finally to tap the enormous pent-up demand of customers in this huge country with its burgeoning population of middle-class consumers.

Growth over the past decade has allowed more than 40 million people to escape poverty and join the ranks of the middle class.

"We are very excited about the first of what we hope will be many stores in Brazil," said Steve Cano, Apple's senior vice-president, speaking to the Valor business newspaper.

Brazil is the world's seventh-largest economy and Latin America's biggest.

There are just 26 million smartphones in a population of close to 200 million people, making the market extremely ripe for growth.

"Over 50 per cent 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, said at the Goldman Sachs Technology and Internet Conference.

Agence France-Presse, Bloomberg