Apple Raises Prices on Several Products in Many Countries Amid Strong U.S. Dollar

[cfedu]

I don't know where you live but here in Manitoba, Apple's prices have always, consistently been 50-100 dollars more for iDevices, 100+ for Macs for Canadians. Even when the Canadian dollar was strong.

You are wrong, and I have been to Manitoba lots. I have ever been to The Apple store in Polo Park.

http://www.iphoneincanada.ca/news/apple-prices-in-canada-finally-reach-parity-with-the-u-s/

 

[brentsg]

I think tax issues and fairness aside, there's something wrong with the concept/system when products are costing several hundred euro more today than they did yesterday.

So you would prefer that the price of the item changes daily or weekly, so as to avoid any significant periodic adjustment? Think about what you're asking for.

 

[mayhemburzum]

So the products cost has increased. I'm more concerned that an applecare advisor ia still making minimum wage in my country.

 

[IJ Reilly]

Bla bla bla..

Blah, blah yourself.

The definition you provided does not make your case. If parity is to mean anything of any use whatsoever it must represent value, not an arbitrary number.

Some years ago the GBP exchange rate sunk to nearly $1.00US. The rate was so favorable to Americans that they were flying to London for weekend shopping trips. Would you call that "parity" and if so how is that a useful way of representing what happened? The GBP skid did not last long, as large changes in valuation tend to be brief, and before long the exchange rate returned to closer to its historical averages.

Incidentally, what is the 60-year average of the USD vs. CND? $1.25. Shocking, since that is the value today.

As I said before, the concept I am actually discussing here can only be applied to locally produced goods (the principle behind the "Big Mac Index"). For imports, all bets are off. But it should hardly be surprising that a weak currency results in increased prices for imports. On the flip side, it also improves export markets for the country with the relatively weaker currency.

 

[brentsg]

You think that the profit on these machines is only the price hike?

Apple make huge profits on their hardware, you aren't trying to tell me that a macbook pro costs £800 to manufacture and ship?

So now the only cost of goods sold is manufacturing and shipping? Nice!

 

[Pondfiller]

What would American consumers say if they find out that American owned company sell products cheaper in Canada or some other countries due to currency rates?

This adjustment is inevitable and reasonable from an economical and objective point of view.

 

[brentsg]

In any case, there is a difference, there has often been a difference. But once you run the numbers with the U.S. sales tax included (or with the VAT excluded) you get to a fairly modest price difference. Licensing costs for IP and other regulatory costs might make up for more of it than you realize. How about just electricity prices to operate the store? I suspect they are much cheaper in the U.S. than they are in Germany or much of the world.

I'm always reading about the superior product protection that the EU consumers benefit from as well. In the USA once the 1 year warranty is done, we're out of luck. Things like this have a cost. It's not just a free benefit.. you can bet that Apple builds these things into EU prices.

 

[cfedu]

Blah, blah yourself.

The definition you provided does not make your case. If parity is to mean anything of any use whatsoever it must represent value, not an arbitrary number.

Some years ago the GBP exchange rate sunk to nearly $1.00US. The rate was so favorable to Americans that they were flying to London for weekend shopping trips. Would you call that "parity" and if so how is that a useful way of representing what happened? The GBP skid did not last long, as large changes in valuation tend to be brief, and before long the exchange rate returned to closer to its historical averages.

Incidentally, what is the 60-year average of the USD vs. CND? $1.25. Shocking, since that is the value today.

As I said before, the concept I am actually discussing here can only be applied to locally produced goods (the principle behind the "Big Mac Index"). For imports, all bets are off. But it should hardly be surprising that a weak currency results in increased prices for imports. On the flip side, it also improves export markets for the country with the relatively weaker currency.

http://www.cbc.ca/news/business/loonie-hits-parity-for-1st-time-since-may-1.1192226

Ok go tell everyone on the world that they are using the word wrong.

I'm talking about currency parity and you are talking about PURCHASING POWER PARITY - PPP. Stop using PPP to explain currency parity, they are 2 different things.

And by the way, you are wrong about locally produced goods. Oil and gas are produced in Canada but are priced in US Dollars, becasue of this gas prices have dropped slower than in the USA as the Canadian Dollar was dropping at the same time.

 

[IJ Reilly]

http://www.cbc.ca/news/business/loonie-hits-parity-for-1st-time-since-may-1.1192226

Ok go tell everyone on the world that they are using the word wrong.

I'm talking about currency parity and you are talking about PURCHASING POWER PARITY - PPP. Stop using PPP to explain currency parity, they are 2 different things.

And by the way, you are wrong about locally produced goods. Oil and gas are produced in Canada but are priced in US Dollars, becasue of this gas prices have dropped slower than in the USA as the Canadian Dollar was dropping at the same time.

Oil and gas are benchmarked in USD worldwide. So welcome to that concept.

Yes, I am using the meaningful version of the word, the one that refers to what can actually be purchased. I was perfectly clear about that from the start.

 

[LordVic]

I don't know where you live but here in Manitoba, Apple's prices have always, consistently been 50-100 dollars more for iDevices, 100+ for Macs for Canadians. Even when the Canadian dollar was strong.

Same with Ontario.

the problem is long term trend and not the recent upswing that many of us Canadians are getting pissy about.

in the 90's, the Dollar was similar, a 1.25CAD = 1USD. It was quite common at this time to see that items in Canada were 25-35% more expensive due to this difference, (plus labour costs are more in Canada too)

however, over the course of the 00's, The Canadian dollar value went up and the US dollar value went down, to a point where for a significant amount of years the dollar amounts were near the same.

Canadian prices did not go down.

This equated to instant high profit margins for American companies who could now convert their Canadian earnings to equal US dollar amounts.

I repeat: The Canadian costs of items did NOT DECREASE as the two curruncies became on par with eachother.

Now, we're starting to trend back to a stronger US dollar, bringing the ratio closer to the 1.2:1 again.

And they're talking about raising Canadian prices as a whole in order to account for the difference in the dollar.


it's double dipping. You didnt discount when the dollar was even, so why do you need to jack the prices more now?

As is, The cheapest MBA is $899 USD, but $1099 CAD. $200 difference for the bare entry unit.

 

[cfedu]

This is the myth of "parity." When one USD equalled one CND, this was not "parity," it was just an arbitrary 1:1 currency relationship. As any American who travelled in Canada at that time knows, everything in Canada cost 20-30% more dollars. Now that the USD is worth about $1.25 CN, this is much closer to real parity, as the costs of goods in the countries are now much closer to the same.

This is completely wrong. PPP has been reduced more since the Canadian Dollar has gone down the drain. With dollar being back down the prices are back to there historical normal range, this is more normalcy rather than parity.

Without the reduction in fuel prices, inflation in Canada would be pretty terrible right now.

When the Canadian dollar HIT parity slowly most prices in Canada were going down and our PPP increased and Canadian had more money.

I kinda do not mind the hit I'm taking, if it helps Canadian manufactures. I'd rather see the Canadian economy get stronger rather than saving a little on a new Apple computer.

----------

Same with Ontario.

the problem is long term trend and not the recent upswing that many of us Canadians are getting pissy about.

in the 90's, the Dollar was similar, a 1.25CAD = 1USD. It was quite common at this time to see that items in Canada were 25-35% more expensive due to this difference, (plus labour costs are more in Canada too)

however, over the course of the 00's, The Canadian dollar value went up and the US dollar value went down, to a point where for a significant amount of years the dollar amounts were near the same.

Canadian prices did not go down.

This equated to instant high profit margins for American companies who could now convert their Canadian earnings to equal US dollar amounts.

I repeat: The Canadian costs of items did NOT DECREASE as the two curruncies became on par with eachother.

Now, we're starting to trend back to a stronger US dollar, bringing the ratio closer to the 1.2:1 again.

And they're talking about raising Canadian prices as a whole in order to account for the difference in the dollar.


it's double dipping. You didnt discount when the dollar was even, so why do you need to jack the prices more now?

As is, The cheapest MBA is $899 USD, but $1099 CAD. $200 difference for the bare entry unit.

But they did

http://www.iphoneincanada.ca/news/apple-prices-in-canada-finally-reach-parity-with-the-u-s/

 

[brdeveloper]

Well Apple will feel some pain by exporting technology with a high USD. I would not be surprised if this hurts their profit margin over the next year.

A $1,750 Ultimate MacBook was a good deal, but at $2,100 many will pass or wait until absolutely necessary.

$0.02

Are most Macs technically "exported" from USA? Technically the pricing policy should be yuan-based, even more if you think that Apple keep profits overseas. Only the design phase has to be paid in dollars.

 

[ohbrilliance]

Apple should start paying its proper income tax here if it wants to jack up prices

Apple has a duty to maximise profits for shareholders, so will pay the least taxes they are legally required to. Assuming they aren't breaking any laws, would you expect them to voluntarily pay more taxes than they are?
The tax codes will need to (and should IMO) change for that to happen.

 

[brentsg]

Apple has a duty to maximise profits for shareholders, so will pay the least taxes they are legally required to. Assuming they aren't breaking any laws, would you expect them to voluntarily pay more taxes than they are?
The tax codes will need to (and should IMO) change for that to happen.

I'm sure none of these complainers are paying any more taxes than they're legally obligated to.

 

[gnasher729]

I agree with your analyse, the only thing that pissed me off is the way Apple increase their prices.

For example : MBP 13 retina

yesterday's price : 1299 € - VAT = 1082.5 € ie 1174.07 USD (exchange rate on yesterday)
today's price : 1449 € - VAT = 1207.5 € ie 1296.16 USD (exchange rate on today)

Difference = 122.09 USD

Am I totally wrong, or ?

That's still cheaper than the US price.

----------

I'm sure none of these complainers are paying any more taxes than they're legally obligated to.

I always pay an extra £100 to HMRC. Makes them happy
No, I don't.

----------

Apple has a duty to maximise profits for shareholders, ...

Actually, they don't. Apple has a duty to do whatever they published in their corporate charter. Investors who don't agree with Apple's goals as expressed in their corporate charter should invest elsewhere. As Tim Cook told some of them.

----------

And by the way. Don't they teach you about freedom of speech anymore?

Most people have some degree of freedom of speech. There is no freedom to talk nonsense and not be told about it.

 

[Abstract]

The "Burgernomics" articles was from The Economist, not wikipedia. The Economist has been compiling the "Big Mac Index" for around 30 years as a way of comparing the valuations of currencies based on identical locally-produced goods, which is really the only way it can be done. Not sure where you get 2006, since the current index is for 2015. I don't remember what the exchange rates were that far back, but in 2011 (the last time I was in Canada) one USD bought one CND. Everything was expensive for Americans traveling in Canada and Canadians were getting bargains traveling to the US, just as you'd expect. Not so much now.

In other words, he Just Made Up Some Stuff.™


How is it possible that he has never heard of The Economist's Big Mac Index?

 

[IJ Reilly]

This is completely wrong. PPP has been reduced more since the Canadian Dollar has gone down the drain. With dollar being back down the prices are back to there historical normal range, this is more normalcy rather than parity.

Without the reduction in fuel prices, inflation in Canada would be pretty terrible right now.

When the Canadian dollar HIT parity slowly most prices in Canada were going down and our PPP increased and Canadian had more money.

I kinda do not mind the hit I'm taking, if it helps Canadian manufactures. I'd rather see the Canadian economy get stronger rather than saving a little on a new Apple computer.

Sorry, none of this makes any real sense.

BTW, the CPI in Canada for all of 2014 was 2.0%. For the US, it was 1.6%. Funny how close.

----------

In other words, he Just Made Up Some Stuff.™


How is it possible that he has never heard of The Economist's Big Mac Index?

Dunno if you are just being facetious, but no matter, I am done.

 

[gnasher729]

The UK harbours millions of criminals Hope you never buy clothes in the USA and bring them back, and become a criminal by not paying import duties & VAT.

Jibes aside, you would make some savings if you claim back the sales tax on the item as you mentioned. Laptops are actually, import duty free. That being said, you should still pay VAT on the item you bring back which is a cool 20%, if you don't try to pass it off as your own personal equipment (as most do tbf...). Not that I'm endorsing that anyone participates in tax evasion.

There's a limit up to which you can import without paying anything; that's a total value of £390. So buying clothes for private use or to give away as presents up to £390 of value is fine. That's why I said bringing one of the cheaper iPads is fine, as long as you stay below £390.

 

[wschutz]

Then you don't understand how they keep their money. The money isn't kept in the local banks or something. It all flows into Ireland in DOLLARS!

Uh? Do you have anything that supports the non-sense conversion of currency unless needed?
Why would Apple convert the EUR into USD to have them in Ireland? They do use Ireland to lower the corporate tax but it doesn't make sense converting it into USD since they have to pay tax for any USD that enter the US...

I understand that the obvious is to play with the balances in each currency at the best interest of profit. Apple has lots of expenditures in EUR, and for that it wouldn't make sense converting EUR to USD to EUR again... same applies for any other currency/country they accept/sell to.

But anyhow... as I said, a strong USD is good for everyone but US companies selling abroad, including Apple. We'll see how numbers work out for Apple in some months. For what is worth, I bought my iPhone 6 last Christmas and no plans on buying any phone in the next 3 years. And as for a laptop... I won't get anything that is not a rMBA, and I am patient and happy with my 2010 MBP. In 3 years EUR-USD won't be in current parity

 

[weckart]

Nope. It's now £59 here in the UK. Down from £99.

Nope, down from £79, so at least going in the right direction. However, we are talking iPad 2 era tech so the real issue is that Apple has clearly lost interest in its hobby projects.

 

[mKTank]

You are wrong, and I have been to Manitoba lots. I have ever been to The Apple store in Polo Park.

http://www.iphoneincanada.ca/news/apple-prices-in-canada-finally-reach-parity-with-the-u-s/

Well Polo Park didn't change their prices to match U.S..

Source: friend works there and I'm there on an almost weekly basis.


These prices may have been only for the online store. Either way, I know for a fact Polo Park stayed higher.

----------

Same with Ontario.

the problem is long term trend and not the recent upswing that many of us Canadians are getting pissy about.

in the 90's, the Dollar was similar, a 1.25CAD = 1USD. It was quite common at this time to see that items in Canada were 25-35% more expensive due to this difference, (plus labour costs are more in Canada too)

however, over the course of the 00's, The Canadian dollar value went up and the US dollar value went down, to a point where for a significant amount of years the dollar amounts were near the same.

Canadian prices did not go down.

This equated to instant high profit margins for American companies who could now convert their Canadian earnings to equal US dollar amounts.

I repeat: The Canadian costs of items did NOT DECREASE as the two curruncies became on par with eachother.

Now, we're starting to trend back to a stronger US dollar, bringing the ratio closer to the 1.2:1 again.

And they're talking about raising Canadian prices as a whole in order to account for the difference in the dollar.


it's double dipping. You didnt discount when the dollar was even, so why do you need to jack the prices more now?

As is, The cheapest MBA is $899 USD, but $1099 CAD. $200 difference for the bare entry unit.

Exactly. Canada prices are and have always been higher, even if our dollar did well.

Seems they're quick to 'match parity' when our dollar goes down but they take their sweet ass time when our dollar gets strong.

 

[tentales]

Same here, even when the Canadian Dollar was kicking the U.S. Dollar a year or 2 ago most Apple products always had a $50 premium in Canada for some reason. Apple just being greedy.

Yep, between Jan and Aug 2011, the CAD was above parity, varying around 5% more valuable than the USD, yet for those 8 months Apple's prices (and most other US companies) remained higher in Canada than the US.

It's the same asymmetry between crude oil and the price at the pump.
Pump prices just jumped 20% for most of Canada, while crude remains just under $50/barrel.

It's a Gordon Gecko world.

 

[576316]

Nope, down from £79, so at least going in the right direction. However, we are talking iPad 2 era tech so the real issue is that Apple has clearly lost interest in its hobby projects.

Oh, it was at £79 directly from Apple? I thought that had been a John Lewis deal. Neato.

 

[cfedu]

Well Polo Park didn't change their prices to match U.S..

Source: friend works there and I'm there on an almost weekly basis.


These prices may have been only for the online store. Either way, I know for a fact Polo Park stayed higher.

----------


Exactly. Canada prices are and have always been higher, even if our dollar did well.

Seems they're quick to 'match parity' when our dollar goes down but they take their sweet ass time when our dollar gets strong.

The Every Apple store in Canada have the same prices. I'm not sure if Best Buy lowered their prices, but that ok as I would just price match and get even more of a discount.

Your friend is wrong, I worked in Winnipeg during that time and I can confirm that they had the same price as every other Apple store in the country.

 

[mKTank]

The Every Apple store in Canada have the same prices. I'm not sure if Best Buy lowered their prices, but that ok as I would just price match and get even more of a discount.

Your friend is wrong, I worked in Winnipeg during that time and I can confirm that they had the same price as every other Apple store in the country.

I live here. They never matched the U.S.

You'll just have to accept that you're wrong.

Or not. I don't really care.

----------

Yep, between Jan and Aug 2011, the CAD was above parity, varying around 5% more valuable than the USD, yet for those 8 months Apple's prices (and most other US companies) remained higher in Canada than the US.

It's the same asymmetry between crude oil and the price at the pump.
Pump prices just jumped 20% for most of Canada, while crude remains just under $50/barrel.

It's a Gordon Gecko world.

Exactly.

I recently went to the U.S. and I filled up my car for around 30 dollars. I thought my fuel needle was broken or something and that my tank was already half-full.

It costs around 60-70 dollars here to fill up a tank on a midsize sedan. It sucks.