That's precisely I'm talking about. No it's not the issue of higher VAT rates.
As a marketing and sales professional your pricing benchmarking is what customers are paying; not the perception of price.
In the US this maybe benchmarked differently, as the VAT never gets stated in the pricetag of any product. But everywhere else it's not - and that makes sense as people anticipate what they are going to pay when they are making the purchase decision.
I need to pay 1910 USD for 16PM 512GB in the NL.
I need to pay 1500 USD for 16PM 512GB in the US.
simple as that.
Another example 1x Snickers bar costs 1.39 USD in the NL (1.29 EUR). It costs 1.41 USD in the US (both average)
The NL price include 21% VAT.
If the issue isn’t about higher VAT then you shouldn't include VAT in the comparisons. Use Apple pricing instead, not Apple pricing plus government purchase taxes/fees. That's precisely what I did.
Based on my 16 Pro Max figures and factoring in the exchange rate, Apple (again, not Apple plus governments) has very similar pricing in the U.S. as it does in the Netherlands. That was my point. Period.
One possible scenario:
Step 1: Apple sets U.S. pre-sales tax price e.g., $1,599 for iPhone 16 Pro Max with 1TB
Step 2: Apple makes adjustments for country differences e.g., longer EU warranty adds $199
Step 3: Apple adds steps 1 and 2 together e.g., $1,599 + $199 = $1,798.
Step 4: Apple adjusts to local currency e.g., $1,798 converted to Euros is around €1,630
Step 5: Apple adds VAT e.g., €1,630 + Netherlands VAT = €1,972
Step 6: Apple rounds to nearest $9 (as Apple tends to like to use "charm pricing") e.g., €1,972 becomes €1,979
What is the price of a 1TB iPhone 16 Pro Max in the Netherlands? €1,979.
As a
separate discussion, do Apple consumers in Europe pay more overall than those in the U.S.? It certainly appears that way but that’s because of the much higher average VAT compared to average state/local sales tax in the U.S. However, that's a government purchase tax issue which is a separate matter and not what I was trying to address regarding exchange rates.
If Europeans want to see lower prices, perhaps they need to try to get their governments to lower VAT rates. Otherwise, pre-VAT iPhone prices are already pretty similar to pre-sales tax prices in the U.S.
FYI... I'm not sure where you got your 7.25% figure from but unlike VAT in European countries, state and local sales taxes (not called "VAT" here) in the U.S. are not necessarily the same for all products or in all cities/states across the country.
www.xe.com
