iPhone SE Priced at Premium in Australia and Elsewhere

[Schriefer]

This is tremendously over simplified. Besides taxes, as people have already mentioned, there's tariffs for imports as well as the cost of doing business in these countries. They calculate prices to cover their operating expenses plus profit. For instance, labor at Apple stores is more expensive, corporate taxes, rent, etc etc. Let's not just assume that their overhead is the same and they're just jacking up their profits.

 

[CFreymarc]

One more thing Trump can complain about, "Your socialism is keeping iPhones expensive."

 

[Fancuku]

Depends whether I spoke to a retail clerk, had a runner retrieve my pre-order from the back of the store, or consulted with the genius bar before purchasing. Standard USA tipping etiquette for Apple Store is:

retail clerk: 15%
runner: 5.7%
Genius: 22% is the wait was less than an hour, 18% if over an hour

You should write that down in case you visit a US Apple Store, it can be quite confusing.

I have never heard of anyone tipping an Apple store employee or any retail store for that matter. Where do you get this from?

 

[Fzang]

I'm really pleasantly surprised about the SE price.

The iPhone 5C was a severely gimped phone in every way with only a 25% discount, compared to the S. The SE is as powerful as current gen (sans negligible features) with about a 36% discount (calculated from Danish prices).

 

[IGI2]

It's not that bad for the UK. The American price of $399 I presume is without sales tax which equates to £280 at current rates so with our 20% VAT (sales tax for non uk readers) it takes it up to £336 for us.

So yes there is a little premium attached to it of £23 but not as bad as the article makes out.

Because due to its English-speaking nature and culture, UK is almost like US.

In Poland, iPhone SE 16 GB costs 2150 PLN which is 399 GBP and 505 EUROS respectively.

And if you really are from the UK, you know that many Polish people are there because Poland is so poor that even if the iPhone had price exactly like in the US, it still would be a theft in comparison to Galaxy S7.

 

[dave2010]

to be fair, I think paying the extra to buy in Australia under our consumer law is worth it as the warranty is much longer the 12 months Apple offers

 

[cycomiko]

This is tremendously over simplified. Besides taxes, as people have already mentioned, there's tariffs for imports as well as the cost of doing business in these countries. They calculate prices to cover their operating expenses plus profit. For instance, labor at Apple stores is more expensive, corporate taxes, rent, etc etc. Let's not just assume that their overhead is the same and they're just jacking up their profits.

The reality is with all apple products there is a buffer for exchange rate variation etc.

Its possible to calculate this buffer across their product range.

In my local market using the same currency adjustment and adding in sales tax, most apple prices range around the 108 through to 112% of US.

They tend to price their phones at the upper end of this range. ie, the price for the new iphone SE is 10-12% higher than US pricing after adjustment for exchange rate and tax. In comparison the Macbook is around 9% higher. Mac Pro is around 12%. No apple stores in my country. Very few apple staff as its all run through another country.


Here is the fun part.

The ipads come in with a lower cost differential.


ipad pro 9.7 is 3% different.

ipad pro 12.9 is 3% dearer than usa.

iPad air 2 is 3% higher than US.

It shares the same starting price as the iphone SE 16gb or $399 USD. But purchasing an iPad air 2 locally costs me $699, while the iphone SE costs me $749.
[doublepost=1458670679][/doublepost]

to be fair, I think paying the extra to buy in Australia under our consumer law is worth it as the warranty is much longer the 12 months Apple offers

its not always easy to get the random on the phone to follow our extra consumer law requirements...

 

[SBlue1]

Hey Joe, what an uneducated article! Dude get the facts straight. You missed the sales tax and other fees like copyright and import taxes in Europe. For example the $399 price point equals €355 in Germany. The price in Germany is 405, without taxes and fees. Sound a lot better than comparing it to the price it ships after taxes and fees at 489.

 

[macaximx]

Thanks

 

[Schriefer]

The reality is with all apple products there is a buffer for exchange rate variation etc.

Its possible to calculate this buffer across their product range.

In my local market using the same currency adjustment and adding in sales tax, most apple prices range around the 108 through to 112% of US.

They tend to price their phones at the upper end of this range. ie, the price for the new iphone SE is 10-12% higher than US pricing after adjustment for exchange rate and tax. In comparison the Macbook is around 9% higher. Mac Pro is around 12%. No apple stores in my country. Very few apple staff as its all run through another country.


Here is the fun part.

The ipads come in with a lower cost differential.


ipad pro 9.7 is 3% different.

ipad pro 12.9 is 3% dearer than usa.

iPad air 2 is 3% higher than US.

It shares the same starting price as the iphone SE 16gb or $399 USD. But purchasing an iPad air 2 locally costs me $699, while the iphone SE costs me $749.
[doublepost=1458670679][/doublepost]

its not always easy to get the random on the phone to follow our extra consumer law requirements...

If the iPad is only 3% higher with tax then you're getting a deal. Sales taxes in the US is around 6%-8% in most states. Honestly, if you include tax on US prices it's cheaper for me to buy Apple products in the UAE, where I live, than buying them when I home in the US.

 

[bones1389]

I wonder if the varied pricing is the result of any country specific regulations or other legal wranglings beyond VAT or sale taxes that is a cost of doing business for Apple in those countries. Many countries like to squeeze foreign companies for cash, and of course, those companies pass costs along to consumers.

 

[manu chao]

You seem to have forgotten to take in to account import tax. There's also going to be 'thuiskopieheffing' added in there along the way too.

I have asked this question many people and surprisingly haven't really gotten a straight answer from anybody:

If an American company manufactures a product in China and then sells it in the U.S. don't they have to pay an import duty as well (which everybody assumes applies if they sell it in the European Union)? Sure, import duties (for a particular product) might be different for a product manufactured in China depending on whether it imported into Europe or the U.S. But then the opposite question applies for a European company producing in China and selling to the U.S. and the EU: would it pay higher import duties for its products going to the U.S. than for those going to Europe just because its a European company?

American auto-makers have to pay import duties when they manufacture cars abroad (which is why NAFTA boosted the creation of new Mexican car plants manufacturing GM, Ford and Chrysler cars, as it reduced or even completely removed those duties).

My notion has always been that the argument that one reason why 'U.S. products' [that are actually manufactured in China] are more expensive in Europe is that there are import duties to pay for those products when they go to Europe but not when they go to the U.S. cannot really be true. Now trade agreements including free trade zones often include clauses that take the 'local content' in a product into account, meaning how much of the value of a product and its components was created in which country. What I don't know is whether (a) such clauses exist for products imported from China to the U.S. or Europe and (b) whether 'intellectual property content' (including the actual research and development costs) can influence custom duties.

 

[cube]

I wonder if the varied pricing is the result of any country specific regulations or other legal wranglings beyond VAT or sale taxes that is a cost of doing business for Apple in those countries. Many countries like to squeeze foreign companies for cash, and of course, those companies pass costs along to consumers.

It looks largely maketing driven: make the number look nice in the local currency.
[doublepost=1458675877][/doublepost]

This is tremendously over simplified. Besides taxes, as people have already mentioned, there's tariffs for imports as well as the cost of doing business in these countries. They calculate prices to cover their operating expenses plus profit. For instance, labor at Apple stores is more expensive, corporate taxes, rent, etc etc. Let's not just assume that their overhead is the same and they're just jacking up their profits.

Sales at Apple stores are limited. Most of the stuff they just ship from Ireland or China.

 

[Fried_Gold]

As soon as I saw '$399' flash up upon the screen at yesterday's event, I though 'yes!' and guesstimated that after 20% tax, and a little bit more too, it will be priced at £319 or £329 at the absolute maximum.

Unfortunately, my head was in the clouds.

I love Apple products as much as anybody on here however, their whole 'universal conversion rate' with the American Dollar is poor to say the least.

Funnily enough I also expected £319 or £329 when $399 came on screen.

 

[manu chao]

Okay, I've done the maths!
Selecting a few different Apple products, and pricing them up before addition of taxes, and comparing them to the US $ price.

View attachment 622443

As you can see, the UK actually does pretty well, with several products actually cheaper here. The biggest difference is indeed for the iPhone SE, at 4% more in the UK. But this can easily be accounted for by currency and import figures.
So in fairness, I think Apple has converted the $ amount, and rounded up or down as needed to make the GBP a round xx9 figure!

Australia and Euro-countries such as Germany do slightly less well, however.
Only one product out of the seven I selected was cheaper in these countries than the US.
The remainder all saw an increase of up to 15%.
Again currency and import eat into that figure...
But I certainly don't feel this is as much of an Apple foreign-country markup tax as many are suggesting.

Now we are getting somewhere. As you illustrated, taxes (VAT) are the main reason for the differences in quoted prices (there can be other minor fees, recycling, copyright). And as you said, rounding to an attractive price point can also plays a role.

I have looked at the German store (where rounding considerations seem to play almost no role at all), and put together a comparison where I grouped products sharing the same price point in the U.S. together. In particular at the low end (starting at $399), products that cost the same in the U.S. can differ significantly in Germany.Most products are in the +7 to 8% range but what sticks out is the iPad Mini 4 (-6.2%), the iPad Air 2 (only +1.7 and +3.6%) and iPhone SE (+11 and +15%). In other words, in the U.S. the iPad Mini 4 costs the same as the iPhone SE, in Germany the latter is 23% more expensive than the former.

I see two explanations:

1. Exchange rate (and its outlook) at the time of introduction of the product (ie, prices of older products don't get exchange rate adjustments but newly released ones naturally use the current rate).
2. Apple has a global GPM for every product and the actual deviation is in the U.S. to achieve a round number.

[doublepost=1458679250][/doublepost]

Depends whether I spoke to a retail clerk, had a runner retrieve my pre-order from the back of the store, or consulted with the genius bar before purchasing. Standard USA tipping etiquette for Apple Store is:

retail clerk: 15%
runner: 5.7%
Genius: 22% is the wait was less than an hour, 18% if over an hour

You should write that down in case you visit a US Apple Store, it can be quite confusing.

Brilliant.
[doublepost=1458679368][/doublepost]

It looks largely maketing driven: make the number look nice in the local currency.

Look at the table above: They have selected three different numbers in the local currency for three products that cost the same in the U.S..

 

[cube]

Look at the table above: They have selected three different numbers in the local currency for three products that cost the same in the U.S..

For those differences, look for another explanation. The prices are still chosen from marketing-oriented values.

 

[Mildredop]

Depends whether I spoke to a retail clerk, had a runner retrieve my pre-order from the back of the store, or consulted with the genius bar before purchasing. Standard USA tipping etiquette for Apple Store is:

retail clerk: 15%
runner: 5.7%
Genius: 22% is the wait was less than an hour, 18% if over an hour

You should write that down in case you visit a US Apple Store, it can be quite confusing.

Wow, that is confusing. But great advice - thanks. Hoping to visit the US later this year and don't want to upset anyone!

 

[nekton1]

The price in Japan BEFORE adding 8% consumption tax is 52,800 yen for the base model. At today's ER that is US$470 or a $71 (about 18%) price premium. Why Apple?
Add 8% tax on top of that and we're close to $500. I'd been thinking of getting one but not at that price in Japan. I'll get a friend to buy one tax-free in the US when they are in better supply.

 

[thisisnotmyname]

I have never heard of anyone tipping an Apple store employee or any retail store for that matter. Where do you get this from?

It's derivative of Poe's Law with application to the retail space.

 

[T Coma]

They don't seem, they ARE a lot cheaper in the U.S. I can pick one up for $399 out the door from an Apple Store when it goes on sale, because I live a couple hours away from a tax free state.

I wish. Relatively speaking, we get bent over the couch here in the People's Republic of Chicago... to the tune of 10.25%. But everybody's got their finger in the pie in this syndicate town.

 

[AlexBerkman]

Is VAT not 20% everywhere in EU?

Its 25% i Denmark...

 

[PBRsg]

Are the European prices before or after tax? If they're after-tax, it's not that surprising considering VAT can be upwards of 20% in France and just slightly less in other European countries.

In Scandinavian countries, VAT is 25%.

 

[tillsbury]

But, to my knowledge, the 'Apple Store' doesn't exist in New Zealand, and Australia. They are all sold through resellers only, or direct. Could this be 'negotiated pricing' through those resellers, rather than Apple just gouging people 'because they can'?

There are Apple Stores in Australia, but not New Zealand. However, in both countries you can buy from any major electronics retailer at the same prices as Apple offer online. In NZ you can buy online and it gets shipped either from Australia or (for some products) direct from China.

It's worth noting that although the prices in NZ are often higher, the consumer laws here cover repairs for the expected life of the product, which is effectively a warranty for something like five years. Different consumer laws in different countries can make the prices actually turn out relatively good value.

And, as stated above, pricing of products doesn't change with the currency directly. Every now and then, if things get completely out of whack, Apple will recalculate prices in local currency which can make for a pretty significant change. The retina MacBook in NZ is something like six hundred dollars more now than it was on the day of launch. So doing these calculations on different days will give very different results.

 

[Mums]

Its 25% i Denmark...

Yikes! 20% is already such a gouge.

 

[david1610]

Slight aside, but I wish Apple would have a dedicated website to go to for any new product release where you could click on "Check worldwide release dates" even if it contained "Information not currently available. Sign up here to be informed of this." or similar.