On Apple's AppleStore, 1 Euro = 1 USD. No comment.
Or maybe just one comment: Apple makes a margin 25% higher in Europe than in the US provided that 1 Euro is roughly 1.25 USD. So if you purchase for more than 2000 euros on AppleStore, which – I acknowledge, doesn’t happen every day, you’d better go to New York (fare: 500 euros max. for a return trip from Paris or London; it takes no more than 6 hours) for a week-end, bump at Soho or 57th/5th Avenue’s Apple Store for a while, and enjoy Greenwich’s bakeries, Harlem’s Jazz music and Lower East’s restaurants, than wait 3 weeks for your laptop to be shipped.
Consumers don’t usually enjoy being taken for fools. Right now, Apple is surfing on the iPod wave and its brand is in the middle of a momentum (like its stock price). But one day or another, Apple will have to deal with the disruptivity of the Internet, which allows for better price transparency.
PS: by the way, how do you do the Euro symbol on a Mac keyboard?
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At least on my Finnish(/Swedish) keyboard it’s visible over number 4 and has replaced the dollar sign (Shift+4). I get dollar with Alt+4.
I guess that in less Euro-loving countries, the US dominance is still alive and the key sequences are the other way around? =)
Apple has dealt with that disruptivity of Internet with localization. Different power sockets (adapter), regulations (wlan-frequencies), languages (keyboard layout), consumer laws (EU does away with this one inside EU, thankfully)…
I don’t like Apple’s European prices, either, but saying “Apple makes a margin 25% higher in Europe than in the US” is simply untrue.
The main reason for the higher prices is VAT. 19.6% (correct me if the rate is wrong, got it from Wikipedia) of your purchases in France go to the state and not to Apple. For instance, the iPod nano costs 209 EUR at Apple France and 199 EUR at Apple Germany because VAT in Germany is lower (16%).
Prices in the US are quoted without Sales Tax so if you walk into the Apple Store in New York your price at the cashier will be 8.375% higher.
True, if you fly to the US to buy your stuff there, you can save a lot of money. But only if you don’t declare the goods on arrival. And that’s illegal.
Ole> You’re totally right on the 25% more margins thing. However, this is more true than untrue. And to answer Kari as well, the European market is big enough to make sure prices are equivalent in both the EU and the US. So I still believe it’s a shame.
About customs: C’mon Ole…I understand your point, but we could just anticipate on the day the US and the EU will form together a vast free-trade and peaceful geopolitical ensemble, as Victor Hugo and Goethe had dreamt about.
Jeremy: this is not about customs, it’s about TAXES. I do not know the EU customs regulations for computer imports and maybe customs have to be paid in the US too because the computers are assembled in East Asia.
But for the sake of the argument, let’s assume that Apple has unified pricing around the world and both the US and EU do not charge any customs.
In that case, a Mac that costs US$2000 in the Apple online store (free of sales tax when shipped to a different state) would cost you US$2167.50 in the Apple Store NY, US$2392 or 1914 EUR in France (assumed USD/EUR 1.25) and US$2320 in Germany.
Prices for the consumer are radically different, but Apple receives exactly the same in all cases. And since Apple’s margins in the hardware business are probably lower than these differences it’s totally unreasonable to expect the same end-user prices.
European legislators are to blame, not Apple. And in principle, even a trade union between the EU and the US wouldn’t change anything of this. (Of course, the EU regulations allow consumers to pay VAT in the country where they bought their goods, but this is not part of a free trade union in itself.)
I get your point Ole, and it makes perfect sense. However, I don’t think European countries will ever lower the VAT – unless they higher other taxes (income, etc.). Thank you for your clarification.
One last thing: imagine the US VAT roughly amounts to 10% of the device against 19,6% VAT for France. That’s still an 10% difference. 25% – 10% = 15%, a ‘free’ margin for Apple.
Your argument is strong indeed, but there’s something unclear and a little unfair about assuming 1 Euro = 1 USD on Apple’s side.
Kari> I’ve found the ¥ (shift + alt + $) and € (alt + $) signs. Thanks for your help.
Jeremy: unlike in France, prices in the US are usually quoted without the sales tax, which is then added to your bill at the cashier. That means, if you walk into an Apple Store in the US and buy something, you will actually have to pay approx. 10% more than the price tag. So the difference might not really be 25% but more like 15% (and 10 points of these 15% are due to the higher taxes in Europe).
Ole> I actually wrote 15%, not 25% as you mention, so I’m glad we agree.
It’s always pleasant to have interesting conversations and I’m happy about the fact that Tech IT Easy concentrates every day more nationalities. You’re from Germany, Kari’s from Finland, Vincent is German – Dutch and I’m French.
Jeremy, we do not agree as long as you call these 15% “a ‘free’ margin for Apple”. Two thirds of it go to Euopean governments. The rest (5% of the price) may be due to customs or indeed go to Apple, I’m not sure.
Ole> I had actually already accounted the VTA before the calculation. And there are customs too in the US! (Apple manufactures in China)
These are not surprising my anymore, but thanks..