Apple Raises iPad and iPod Prices in Japan

VAT supports Full Health Care for anyone in a VAT system. It's amazing how few people I know in Europe whine about the VAT. They tend to be Americans who don't mind getting all the medical and preventive care treatment while there--they just don't want to help pay for that treatment.

We call that freeloading.

IbisDoc said:

Pretty slimy of Apple to raise the prices based on the exchange rate, when they plan to keep the money overseas and don't have any plans to exchange it into US dollars.

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This makes no sense whatsoever... clearly uninformed.

Bubba Satori said:

Yep.
Race to debase.
Creating the illusion of prosperity by printing money and destroying currencies.

http://www.dailyfx.com/forex/fundam.../08/Central_Banks_Run_the_Race_to_Debase.html

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The strong Yen didn't help Japan in the last 20 years to recover from deflation and pathetically low growth levels.
Japanese economists have believed what you believe for 20 years and recently realized that they were wrong all along. They are trying the other direction to stimulate the economy. Time will tell if the new approach is more successful or not.

However, this price increase from Apple, if anything, is a sign that the new policies are working. It will make Japanese consumers buy Japanese products instead of imported stuff thus stimulating the local economy. Also these price increases will generate inflation (after decades of deflation) which will finally make companies and consumers spend their money instead of sitting on it.

All in all, you may argue that in the US QE is a bad idea, but in Japan QE seems to be the right solution because of their deflation and depressed economy.

Since the Yen is also a reserve currency, just like the USD, the side losing on it will be the large holders of Yen reserves. But so far the top economies, the holder of those reserves, seem to be tolerating the slide of the currency.

Bubba Satori said:

Creating the illusion of prosperity by printing money and destroying currencies.

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I don't believe they really printed that much money. Look at the size of a money stack, and compare it with the size of the engraving offices. A trillion dollars takes up football fields of space... I doubt they have that capacity with all of their other printing duties: U.S. debt

gnasher729 said:

More than 20% change in exchange rate in the last 9 months, so a price adjustment seems justified.

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Why? They don't bring the profit back to the US to be taxed so why use the US Dollar as a basis for rate exchange?

Double dipping?

IbisDoc said:

Pretty slimy of Apple to raise the prices based on the exchange rate, when they plan to keep the money overseas and don't have any plans to exchange it into US dollars.

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It appreciated against Renminbi and all the rest of the world as well, not just USD.

SnowLeopard2008 said:

This makes no sense whatsoever... clearly uninformed.

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How is he/she uninformed? You didn't read or watch Tim Cooks statement to Congress?

Who's uninformed? It sounds like you.

4TheLoveOfTech said:

Why? They don't bring the profit back to the US to be taxed so why use the US Dollar as a basis for rate exchange?

Double dipping?

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Apple wouldn't need to raise prices if those products were manufactured in Japan. However they are exported from China to Japan, so because of the exchange rates Apple was earning about 25% less money on their device sales compared to 9 months ago.

There is even a word for it: Abenomics

Quick Apple: Release iPhone 5S and iPad Mini retina before the numbers get too high

4TheLoveOfTech said:

How is he/she uninformed? You didn't read or watch Tim Cooks statement to Congress?

Who's uninformed? It sounds like you.

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Why is it "pretty slimy" of Apple to increase prices based on exchange rates? Apple holding money over seas has nothing to do with the prices they charge overseas. Congress, Tim Cook, etc. are completely irrelevant.

Prices are based off of the USD. And because exchange rates have changed considerably since the price was initially set, Apple adjusted the prices accordingly. Nothing slimy or dishonest or dirty or morally gray about this practice.

If you sold X item that gives you $100 USD in Japan and now the exchange rate basically gets you only $90 USD, wouldn't you raise prices too? You're losing $10 on revenue per unit sold and there is no good reason for that except Japan's economy and yen depreciation.

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4TheLoveOfTech said:

Why? They don't bring the profit back to the US to be taxed so why use the US Dollar as a basis for rate exchange?

Double dipping?

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Do you have ANY idea how the economy, exchange rates and off shore accounts work?!? Jesus Freaking Christ.

There has to be SOME standard to base the other prices off of. Since Apple is an American company, makes sense to base prices off of USD.

mdriftmeyer said:

VAT supports Full Health Care for anyone in a VAT system. It's amazing how few people I know in Europe whine about the VAT. They tend to be Americans who don't mind getting all the medical and preventive care treatment while there--they just don't want to help pay for that treatment.

We call that freeloading.

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Exactly! Being from the U.K., it amazes me the ignorance on socialized democracy systems and the amount of fear mongering that the general U.S. population feeds into.

lk400 said:

That is the entire point - that prices will rise.

The theory is that while prices are static or falling, as they have been for almost 20 years in Japan, people have more motivation to stick their money in the bank, and less motivation to buy today. This stalls the economy and retards consumer spending.

If prices are rising, people have incentive to rush out and buy now what they might need, before prices go up, and this stimulates the economy.

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I think the Japanese would have been happier with a cheaper iPod! Inflation only help the bankers. Silly Keynesians.

Yes, but lower the price in EU is non sense, right?
We pay a lot more than US...

Just to be clear, we pay more than 100US$ for an iPad Mini 16gb
329US$ vs 339€

Dmunjal said:

I think the Japanese would have been happier with a cheaper iPod! Inflation only help the bankers. Silly Keynesians.

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That's indeed pretty much the dilemma.
You can choose between a weak economy with cheap iPads and a growing economy with more expensive iPads.
Or put it another way, you either live your future up for a cheaper iPad today or make some sacrifices today for a better future.

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mdriftmeyer said:

VAT supports Full Health Care for anyone in a VAT system. It's amazing how few people I know in Europe whine about the VAT. They tend to be Americans who don't mind getting all the medical and preventive care treatment while there--they just don't want to help pay for that treatment.

We call that freeloading.

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The problem is that VAT doesn't support public healthcare in the EU. For that there is a separate healthcare tax that is paid both by the employee and the employer.
Also, if you are a non-EU citizen and need healthcare in the EU, then you have to pay for it. There is no freeloading.

gpsouza said:

Yes, but lower the price in EU is non sense, right?
We pay a lot more than US...

Just to be clear, we pay more than 100US$ for an iPad Mini 16gb
329US$ vs 339€

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I'm sure Apple doesn't have higher operating margin in Europe than in the US. They set their prices the way that the same device sale will earn them the same amount of money. The difference in price comes from multiple sources: Value Added Tax, corporate taxes, import duty, higher cost of transportation and employees, and also the smaller and more fragmented market drives costs up.
If you don't like it, I recommend you vote out your politicians and elect ones that are more market friendly.

Actually, I just looked up the latest margins: US=36.6%, EU=35%. So Apple is already making less money on sales in the EU compared to the US.

mrxak said:

Value Added Tax. Value added to whom?

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You're really going to debate the semantics of sales tax nomenclature?

meanwhile in India...

http://appleinsider.com/articles/13...p-400-thanks-to-aggressive-pricing-strategies
Apple's iPhone sales reportedly up 400% in India thanks to aggressive pricing strategies

The computer industry in The US won't provide enough jobs for the low-skilled auto workers.
When the Yen goes low, Japanese cars will outsell American counterparts 3:1. Brace yourselves for the next tsunami hitting Detroit.

tdtran1025 said:

The computer industry in The US won't provide enough jobs for the low-skilled auto workers.
When the Yen goes low, Japanese cars will outsell American counterparts 3:1. Brace yourselves for the next tsunami hitting Detroit.

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May happen. Detroit has already started to complain.

What is difficult to wrap my head around is that a German unionized worker on the car assembly line makes significantly more money than his American counterpart, yet German auto makers are more profitable. It sounds like a management problem.

I'm still surprised that it's been a year since all Apple products sell at a rate of $1 CAD = $1 USD in Canada, even though the canadian dollar has been worth a bit less than USD pretty much the whole time.

For example that new iPod touch announced this morning is selling for $229 CAD ($222 USD). It was the same situation when I bought the 15" rMBP at launch last year.

Meanwhile pretty much all other countries are more expensive than in the US, sometimes significantly.

Moving VAT changes straight to prices seems to common practice for Apple. It has happened here in Finland too.

When new models come out, they are usually something like 1199e. As VAT rises, price goes up to something like 1247e and stays there until new models come out.

Politicians of course would like the price to stay the same and companies taking the hit, so that consumers (voters) wouldn't see how everything got more expensive because of them.

Let's read too much into this!

Apple usually doesn't change prices until a new model is released.... However if we start to read too much into this one could posit that Apple will not be releasing any new ipad models at WWDC, after all why would they raise the price less than 2 weeks before a new model is about to be unveiled?

Seems fair.

Ichabod. said:

Wow, I guess that's what $1.4 Trillion in stimulus does to your currency.

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I'd point out the bigger problem is that there are not things priced in Yen that Apple needs. So apple has no place to spend their Yen they get as profits without PAYING to convert it. Like it or not, the loose US tax laws mean its really easy for companies to move dollars profit in the USA to dollars in raw materials in a mine in Africa. Companies will sell stuff in the USA at lower prices because there are few strings to get the profits back into circulation and cash flow is king.

MOKHAN said:

It's raining Yen.

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akm3 said:

It's raining Yen.

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Raftysworld said:

It's raining Yen.

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Damn you all, that’ll be in my head all day….

foidulus said:

Apple usually doesn't change prices until a new model is released.... However if we start to read too much into this one could posit that Apple will not be releasing any new ipad models at WWDC, after all why would they raise the price less than 2 weeks before a new model is about to be unveiled?

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I guess if they raise the price now (and everyone in japan acts indignant) they’ll forget it by the time the new models are released. Although the price hike is always bad for the consumer, waiting for the fall and releasing a new model at a higher price point is worse PR.