Contrasts

On October 19th, Nokia opened its latest flagship store and the lucky city was São Paulo, Brazil, place where I grew up. The store is located at 849 Oscar Freire Street and this neighborhood is known for high end brands and expensive stores. I have to agree, they chose the right place for a Nokia store.

Just for fun, and maybe saudade (Portuguese word to which there's no precise translation in English), I browsed the Brazilian Nokia website to check some prices for high end phones. The three most popular models (N96, N95 8Gb and E71) are priced at U$977, U$816 and U$612 respectively. The same products are priced U$776, U$577 and U$442 in the American website (though you can get all of them for much cheaper at some virtual stores like Amazon, for instance).

This roughly U$200 difference is probably result of the higher taxation to which imported goods are subjected in Brazil, so it doesn't surprise me that much. What amazes me is the contrast between those prices and the average salary in that country, which is in the vicinity of U$700/month. We must remember that this number, although small in itself, is misleading because of the severe and historical unbalance in the wealth distribution. Considering that the 10% wealthiest Brazilians retain 65% of the wealth, it's easy to conclude that the majority of the population is far away from making the average salary and is making something closer to the minimum salary of U$184/month. Are these people likely to buy one of those phones?

Nokia's bread and butter is in the sale of low end phones in emerging countries like India, China and Brazil itself and these high end phones were clearly not made for the masses. So I think they will get their expected number of sales of high end phones in Brazil because there are plenty of people with money in a population of over 300 million. But I can imagine a poor guy walking by Oscar Freire, glancing at the store and noticing that one of those phones would cost him the income of three months combined - IF he didn't spend money in anything superfluous like food, rent and transportation.

It must be a sad situation, like a slap in your face.

Remarks: all figures were obtained using the exchange rate of November 21st, 2008.