Apple Korea's prices for unlocked iPhone 6 Plus
Today, just one week before official Korean launch, Apple Korea has begun accepting orders for unlocked iPhone 6 series. The price (including VAT, in KRW) goes like this:
iPhone 6: 16GB 850,000 / 64GB 980,000 / 128GB 1,110,000
iPhone 6 Plus: 16GB 980,000 / 64GB 1,110,000 / 128GB 1,240,000
The nominal exchange rate is about KRW 1060 / US$ as of this writing, so the 6 Plus 128GB is about $1170 after taxes (or $1060 before). That's quite more expensive than the USA, where it's $949 before taxes. It turns out that Apple Korea is applying an exchange rate of KRW 1190 / US$, or KRW 130 (12.3%) more every dollar.
$649 x 1190 x 1.1 ~= KRW 849,500 (actual: 850,000)
$949 x 1190 x 1.1 ~= KRW 1,242,000 (actual: 1,240,000)
The baseline price that the mobile carriers have decided upon for selling the devices by themselves is only slightly cheaper by about KRW
Apple Japan's prices for unlocked iPhone 6 Plus
To see how ridiculous this is, let's look at the next-door country, Japan. Apple Japan's prices (excluding tax, in JPY) are:
iPhone 6: 16GB 67,800 / 64GB 79,800 / 128GB 89,800
iPhone 6 Plus: 16GB 79,800 / 64GB 89,800 / 128GB 99,800
The applied exchange rate is about JPY 105 / US$, even though the nominal rate is higher at JPY 108 / US$. This means that Apple Japan is actually selling the iPhone 6 cheaper than compared to Apple USA.
$649 x 105 ~= JPY 68,100 (actual: 67,800)
$949 x 105 ~= JPY 99,600 (actual: 99,800)
To put this in context, let's say a Korean tourist decides to buy an iPhone 6 Plus 128GB or an iPhone 6 16GB in Japan and bring it back home. The person buying it in cash or credit card will have an exchange rate of KRW 9.98 / JPY as of this writing. Therefore:
JPY 99,800 x 9.98 ~= KRW 996,000
JPY 67,800 x 9.98 ~= KRW 676,000
That is considerably cheaper. Plus, the 8% sales tax is waived because of the tourist status, so the person doesn't pay more at the store. Once the person returns to Korea, the customs will impose the 10% VAT on the device for values exceeding US$600.
((99,800 / 108) - US$600) x 0.1 = US$32.40 = KRW 35,000
((67,800 / 108) - US$600) x 0.1 = US$2.78 = KRW 3,000
So how much cheaper would it be in the end?
iPhone 6 Plus 128GB: 1,240,000 - 996,000 - 35,000 = KRW 209,000
iPhone 6 16GB: 850,000 - 676,000 - 3,000 = KRW 171,000
Given that low-cost airline fares for a round trip between Korea and Japan costs around KRW 200,000 or less, the person buying an iPhone 6 (Plus) in Japan will essentially be getting a free trip to Japan for the cost of buying one in Korea. The only major issue with this is that the device will not be eligible for official repairs or refurbishments within Korea.
So if you're a Korean who likes traveling and wants to buy an iPhone, and don't mind going to 3rd party repair shops, then reserve a phone at an Apple Store in Japan and book your flight to pick it up. All this thanks to the outrageous price-gouging by Apple Korea.
Update (16:30): I've taken a look at the prices for LGU+ (3rd largest mobile carrier in Korea) and this is how it goes:
iPhone 6: 16GB 799,000 / 64GB 920,000 / 128GB 1,041,000
iPhone 6 Plus: 16GB 920,000 / 64GB 1,041,000 / 128GB 1,162,000
It's slightly cheaper than what the iPhones traditionally cost from mobile carriers in Korea. It might be because this is the first time LGU+ is able to sell iPhones and it wanted a bit of price advantage.
Update (2014-10-31 10:20): There have been some adjustments and the three carriers have finalized the prices as follows:
iPhone 6: 16GB 789,800 / 64GB 924,000 / 128GB 1,056,000
iPhone 6 Plus: 16GB 924,000 / 64GB 1,056,000 / 128GB 1,188,000
It seems the carriers are trying to boost the total iPhone 6 sales overall by making the cheapest look cheaper. But the other models have increased in price to be just about KRW 50,000 less expensive than the Apple Store price across the board. But since the carriers will charge interest for the monthly installments during the contract period of two years, the total cost should be about the same in the end.