When measuring the cost of living, economists use conventional measures, like the Consumer Price Index (CPI), which monitors the prices of essential goods that fill the average consumer's basket. But there's another measure of the cost of living, the iPhone Price Index (iPI).

When it came out in 2007, the iPhone was an exotic product for the "innovators" and the "early adopters" were enchanted by its novel features. Nowadays, the iPhone and competing smartphones are "utilities," necessary products for the masses to navigate the digitalization of everyday life. Nonetheless, conventional cost of living measures like the CPI fail to account for these gadgets' costs. At least not explicitly, as they do with food, energy and rent.

The iPhone Price Index, compiled by Grover.com, compares the affordability of iPhones across countries in terms of hours it takes for people who work at minimum wage to afford an iPhone.

The results are astonishing.

Americans must work 114 hours to afford an iPhone 13. Compared to people in China, Thailand and Vietnam, countries in which iPhones are manufactured, that isn't that bad. They have to work 680 hours, 760 hours and 917 hours, respectively, to afford an iPhone 12. And there's India, where people must work 3,667 minimum-wage hours, and Venezuela, where people must work the most: 7,062 hours.

Why is the price of the iPhone so high?

Because Apple's strong brand, extended ecosystem and limited competition by other smartphone makers provide the company a great deal of pricing power. Unlike other consumer products on sale, iPhones do not go on sale, allowing Apple to retain high profit margins 15 years after the iPhone was launched.

What can be done to address the iPhone cost-of-living problem?

A couple of things.

One of them is for consumers to buy competing products from Korean and Chinese smartphone makers, which sell at a fraction of iPhone prices. Another solution is for Apple to develop simpler, low-end versions of the iPhone to cater to consumers at the bottom of the world income pyramid. That's where billions of consumers are ready to buy what the middle and the top of the pyramid have been enjoying for years, as discussed by C.K. Prahalad in "The Fortune at the Bottom of The Pyramid" several years ago.

That will end up being a win-win strategy for Apple and the world's working poor. It will be a win for the working poor of the world, as it will make such a vital product accessible to them, and a win for Apple, as profits will come from high volume rather than from price.