Korea is next. The South Korean Won is 1300 to 1 USD. That is the worst it has been in more than 12 years. When I moved here in 2002, the won was around 900 to 1 USD. I expect a price increase of 5 to 10% here.
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Apple Increases Prices in Japan by Up To 25%
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Japan has an historically low inflation, especially since the late 90ies. They’ve been in deflation for quite some time during the 2000s, and they have actually been trying to push it up. Contrary to what many may believe, deflation is not good, and will kill economic activity (why buy or invest now, if you can do it for cheaper later).
As such, they definitely aren’t having any inflationary spiral right now. Just for comparison, the IMF projects that the inflation in the UK will be 7.4% this year and less than 1% in Japan. (Both figures are from April, so I’d say they are widely outdated by now).
I believe these price adjustments are mainly due to interest rate differences (as the FED began rising interest rates), which made the JPY depreciate (or the USD appreciate).
Sorry for the very technical analysis! I love economicsNow factor in the stagnant pay rises here in Japan.
It gets even worse. I don't know about Switzerland but in Austria the Apple products cost exactly the same as where I live. Except that average wage in Austria is 3-4 times higher than wage where I live. I imagine it would be same in Switzerland. Of course, cost of living and services is more expensive there but in the end they have more money at their accounts at the end of the month left as we do. So the prices of Apple products are still cheaper there than here. Yet, there are still some people complaining.
I'd never buy an iPhone or iPad here (Japan) regardless. The government here has this goofy law where you can't silence the camera snap sound, even in Silent mode. (It's a misguided attempt to prevent upskirt photos on trains etc.) It's not a big deal, but it annoys me enough to always purchase from outside this market.
Apple's pricing is simply following the increase of every other commodity in this country in the past several months.
Apple's pricing is simply following the increase of every other commodity in this country in the past several months.
a company doesnt care about how expensive is life in a certain country. why it should? Otherwise it should sell an iphone for 3000 in switzerland and for 50 in congo...
There is no such law in Japan. That is mutual agreement of mobile phone producers and sellers.
Apple is free to not do it.
"Anyone remember the last time Apple reduced prices because of exchange rates" is enough. Even in a 3% range
Apple is no stranger to the concept of price elasticity. My guess is that any decrease in demand will be offset by an equivalent drop in supply anyways.
At the end of the day, this seems par the course for any profit maximising company. Costs change, and prices change to compensate.
Point of view. If u tomorrow buy bread and its price raised +100%, what if the seller says "bread price isnt raised, only grain price raised"? ;-)
Merely anecdotal, but this year so many of my customers have chosen to move to Android that it took me by surprise.
I was intending to develop an iOS app for my customers to handle their booking status at my school since traditionallly iPhone ownership was over 90%.
But I think it’s dropped to about 60% as of this year.
I personally cancelled my iPhone 13 pro max which I intended to pick up from Yodobashi in Akihabara this morning.
No way in hell I’m paying 20% more than someone who bought one on Thursday. I like Apple, but not that much.
I used to buy a flagship iPhone every two years, like clockwork. But I’m sticking with my iPhone 11 for the foreseeable future.
I may even just get a battery replacement this time, which I’ve never done before.
There would be no reason to see anything close to 20% to 25% price increases here.
Inflation could come into play a bit but when the iPhone 13 launched last September, the U.S. was experiencing 5.4% (and rising) inflation yet prices stayed the same or dropped $50 versus comparable iPhone 12 versions. There have been iPhone 14 price "leaks" out there (e.g., no price increase on iPhone 14 but iPhone 14 Pro and Pro Max seeing $100 increases) but nothing is official yet.
This won't stop at Japan. We'll see 20-25% increases across all products in the UK as they go through their refresh cycles. And probably out of cylce price increases in the next few months for products that are not due an update within the next 6 months.
For Japan it might be somewhat of a good thing. Yes commodities and imports will be more expensive but relative labor costs might also come down a little as well as export prices. Whether deserved or not at this point, “Made in Japan” still holds some value and it could bring some much needed mid- to high-end manufacturing back to Japan, which would have other benefits in preserving a skilled labor force. Japan is also overdue for a little inflation (which is still very low compared to other developed countries) since inflation has been almost flat for decades which has also partially causing a stagnating economy.
a lot of corporates are bragging in earnings calls and AGMs about using the cover of inflation to fatten their profit margins on the goods they sell. Apple will make this back with the next release and then some. like with the m² MBPs.
Japan has an historically low inflation, especially since the late 90ies. They’ve been in deflation for quite some time during the 2000s, and they have actually been trying to push it up. Contrary to what many may believe, deflation is not good, and will kill economic activity (why buy or invest now, if you can do it for cheaper later).
As such, they definitely aren’t having any inflationary spiral right now. Just for comparison, the IMF projects that the inflation in the UK will be 7.4% this year and less than 1% in Japan. (Both figures are from April, so I’d say they are widely outdated by now).
I believe these price adjustments are mainly due to interest rate differences (as the FED began rising interest rates), which made the JPY depreciate (or the USD appreciate).
Sorry for the very technical analysis! I love economics
exactly. and for all those federal debt scare folks out there, Japan has been spending at 200% and above “debt” to GDP for about two decades. if you know #MMT you understand why their spending isn’t inflationary, even when they’re trying to lift inflation off the floor, it even went negative for a while.
more info see Bill Mitchell’s blog (he’s now an advisor to the Bank of Japan or Japanese govt in some form or another). or Stephanie Kelton for an introduction the “debt myth” you hear from politicians (left and right) everywhere.
Book - Stephanie Kelton
About The Deficit Myth Vice-president Dick Cheney famously boasted, “Reagan proved deficits don’t matter.” He was wrong. Deficits do matter, but not the way we’ve been taught to believe. We’ve been told that China is our banker and that Social Security and Medicare are pushing us into crisis...
stephaniekelton.com
