iPhones Made in Brazil Price Stays High

By Laura Madden and Esmee Verbeek, Contributing Reporters

RIO DE JANEIRO, BRAZIL – Although the Chinese electronics company, Foxconn began making iPhones in Brazil last year at its new factory in Jundiaí (São Paulo), prices for the ´Made in Brazil´ phones remain high. The factory was originally built to produce iPads, but production of the tablet could not start because according to Evandro Oliveira Santos, director of United Steelworkers of Jundiaí, the manufacturer was still waiting on tax incentives from the so-called Lei do Bem (Goods Law).

The iPhone began production in Brazil in 2011, and the iPad is set to begin sometime in 2012, Brazil News

The iPhone began production in Brazil in 2011, and the iPad is set to begin sometime in 2012, photo by Yutaka Tsutano/Wikimedia Creative Commons License.

Santos told O Globo that it was during this waiting period that the company began manufacturing the iPhone which is less complex than the tablet. According to the unionist, Foxconn is now installing more equipment to manufacture the “Made in Brazil” iPad.

Consumers in Brazil expected a drop in the device’s price, thinking the IPI, Brazil’s tax on imported goods, would be cut. But the costs remain the same.

“It’s nice that it was produced in Brazil, but I think it’s bad to have paid an absurd price, the price of an imported device, for a cell phone manufactured a few miles from my home state,” seventeen-year-old Gabriell Huver from Grande Vitória said.

By way of an comparison, a contract-free 8GB iPhone 4, made in Brazil which is older than the latest 4S model currently on offer, runs in the R$1,800 range in Brazil, or roughly US$1,040. The same phone costs US$549 on Apple’s U.S. site, and US$675 on the UK site.

Virgílio Almeida, the secretary of information technology policy, Brazil News

Virgílio Almeida, the secretary of information technology policy, photo by Mark Hillary/Flickr Creative Commons License.

Foxconn has not commented on the price issue, saying it will not speak about products it makes for its client, Apple, who has also kept quiet on the subject.

The Brazilian government has no intentions of interfering in the pricing of iPhones made in Brazil, according to Virgílio Almeida, the secretary of information technology policy for the Ministry of Science and Technology.

“[Foxconn] has recently begun to produce [in Brazil] and probably still is not a hundred percent benefiting from it,” said Almeida. “As for increasing production, it will be better off to reduce the price.”

“We expect that with the scale of production and market competition, prices fall. This should lead to lower prices,” he added. The secretary clarified that, through the so-called Information Technology Law, “the government has no influence on pricing.”

The Brazilian government exempted Foxconn from contributing to Social Security Financing, among other fiscal incentives the company received when it was authorized to open its Jundiaí factory.

Though the future of the price of the iPhone in Brazil remains uncertain, another Foxconn manufacturer is yet on the lease. On an initiative of the EBX Group, owned by Brazilian business tycoon Eike Batista, there are ongoing negotiations about a new Foxconn manufacture, this time in Minas Gerais.

5 Responses to "iPhones Made in Brazil Price Stays High"

  1. Nicholas  March 6, 2012 at 10:31 PM

    for cry out loud RIOTIMES.COM, be fair and balanced for once,
    Explain to the people here, the IPODS/IPHONES/IPADS that are sold in the US are NOT made in the USA and NEVER WILL. They are made in China/Taiwan, where APPLE pays like close to US$1.80 Per hour to it’s workers. Who can compete with that? those products are imported (FREE TRADE) and sold for a good price in nation where unemployment is high. Is that what Brazil wants? Do you want to outsourcers your jobs so you can buy CHEAP goods with CREDIT you won’t pay back? or do you want MORE slave wages in Brazil? Does that make sense to you? Yes, Brazil does need a tax reform, but based on what? a tax reform based on consumption or production? You cannot have it both way, but remember, wealth is measured by producing, not consuming. This is the case here in the US: Majoriity still buys the new gadgets, made in China, on CREDIT (credit cards), while default rates are rising (not mentioned in the media). We borrow money from China, so we can buy their products CHEAP. People, that is a receip for disaster. Does Brazilians want that? If they want to be out of a job in the future, than they should copy the USA. If you want to be a nation that still produces well with an expensive currency and have great social systems, copy GERMANY.

    You cannot have it both ways. Easy gain, easy pain.

  2. Kevin  March 7, 2012 at 3:17 PM

    @Nicholas

    If a Brazilian worker earns R$600 per month, with a cambio of US$1=R$1.75, the Brazilian worker earns the same US$1.80 per hour as the China/Taiwan worker. How can Brazil NOT compete with that?

  3. Van  March 8, 2012 at 3:36 PM

    A graphic illustration that governments the world over are clients of corporations because of so-called Free Trade. Labour costs in Brazil and China are on par and I assume use identical machinery. We will see see if the price comes down in the range of US$549. You would think after benefitting from various fiscal incentives the company making the phones would suck up the factory start up costs and give the Brasilian consumer a break. The phones are an excellent device–I’m using one to post this–so I guess we’ll buy them whatever the cost. Like monkeys we’re attracted to shiny things.

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