JERUSALEM: As Apple’s latest smartphone hits Middle Eastern
markets consumers have noticed one thing: The price.
Often viewed as a high-tech hub, when is comes to consumer
electronics Israeli tech analysts say pricing goes through the roof.
According to a survey by Israel’s business daily The Marker
the price of an unlocked 16 gigabyte iPhone 4 in Israel will set you back
$1,084, compared to $790 for the same model in the United Kingdom and $751 in
Canada. It is not possible to buy an unlocked iPhone in the United States.
Israel is also expensive when it comes to data pricing. A
one gigabyte data package with Israeli mobile operator Cellcom costs $21
compared to a two gigabyte option for $25 with American operator AT&T.
“The consumer market in Israel is really small and the
profit margin for companies is really small,” Gal Mor an Israeli Technology
blogger at holesinthenet.co.il, told The Media Line. “Its not like in the
United States with tens of millions of early adapters and then 150 million
consumers, where you can afford to sell consumer electronics at a reasonable
price and still make a profit.”  

“It’s very expensive,” he said in reference to the price of
consumer electronics in Israel. “That’s why Israelis prefer to buy on EBay or
when they go abroad. As more people do this there will hopefully be a more
competitive edge.” 
“VAT is quite high in Israel, at about 17 percent, while in
some other markets you don’t have VAT,” Mor added in reference to Israeli sales
tax.
David Shamah, a tech blogger and technology reporter for the
Jerusalem Post, said that the high price of Apple products in Israel is a
function of the market dominance of one company, iDigital, which has a monopoly
over the distribution of Apple products in Israel.
“Basically they do it because they can,” Shamah told The
Media Line. “It’s their way of making money.”
This is not the first time that iDigital has been at the
center for controversy. In April Apple released the new iPad tablet computer in
the United States, but Israeli customers that brought iPads to Israel had them
confiscated and were forced pay for customs storage for the devices.
The official reason given was that the iPad’s wireless
Internet system broadcasted at higher levels than are standard in Europe and
Israel. The ban was soon lifted after this reasoning was proven false.