So what about international pricing

[WytRaven]

Either the iPhone pricing in Australia is about to get the s**t smashed out of it or Apple has a dilemma...

Apple has chosen to display US pricing for the iPad on it's international pages and by doing so is setting a certain expectation. Apple knows full well that, justified or not, people will take out their exchange rate converter of choice and start guessing their local pricing based on the announced US ones.

When comparing other Apple computer products the difference between US and AU pricing is reasonable when one takes into account differences in taxing systems and that sort of thing (not just the exchange rate at any given time).

The iPhone on the other hand is a completely different situation. As of right now the primary difference between iPhone AU and iPhone US is the carrier arrangement. In Australia you can buy unlocked or locked to one of several carriers, whereas in the US it's AT&T or AT&T. Now it is obvious that that exclusivity deal has worked out great for US citz as they get pricing on the iPhone like $299 for the 32GB 3GS.

In Australia we can buy an unlocked 32GB 3GS from Apple for the tidy little sum of $1,040.00 including GST (~$945.00 ex GST). From now on I will compare ex GST AU price vs US price. GST is a 10% blanket goods and services tax in Australia for those that don't know.

So we are talking here about an increase of +216% over the US price in Australia. By comparison the pricing of other Apple computing products is more like a +20% increase.

Ok so Apple has set it's US pricing to slot it neatly between the upper end iPhone and the bottom end MacBook. Below is a representation of what I mean.

US price distribution:
iPhone: $99 to $299
iPad: $499 to $829
MacBook: $999

AU price distribution (ex GST):
iPhone: $653 to $945
iPad: ?? Um we are feeling a little crowded here
MacBook: $1180

So the only thing I can see happening is that iPhone pricing in Australia is about to get smashed. If Apple were to release the iPad in Australia with prices above that of the current iPhones there would not be very many happy Ozzie Apple fans. If they do push down the price of the iPhone then they have the potential to considerably increase iPhone sales as well as capturing the new mobile computing market.

Based on Apple's choice to loudly broadcast the US pricing and therefore set an expectation I would be expecting the 64GB WiFi/3G iPad in Australia to debut at either $999 (incl GST), to stay under the magic "grand", or around $1100 (incl GST) to fit with the approximate +20% mentioned earlier.

Anyone else got any thoughts on this or similar "analysis" for their countries?

 

[Chundles]

You've confused the iPhone prices. You need to compare contract-free iPhones in the US which start at ~US$499 for the 8GB iPhone 3G. This phone is still locked though so it's not a direct comparison.

I think we'll see:

iPad WiFi:

16GB: A$649
32GB: A$779
64GB: A$849

These don't crowd the iPhone prices because, to do a direct comparison with the US where the phone is $99 on a 2 year contract you'd need to compare the contracts here where the iPhone is typically free.

 

[WytRaven]

You've confused the iPhone prices. You need to compare contract-free iPhones in the US which start at ~US$499 for the 8GB iPhone 3G. This phone is still locked though so it's not a direct comparison.

Hmmm I wasn't aware there was such a thing as an unlocked iPhone in the US. I thought that they were all locked to AT&T (I was just using http://www.apple.com vs http://www.apple.com/au). Apologies for my ignorance on that subject.

 

[Chundles]

Hmmm I wasn't aware there was such a thing as an unlocked iPhone in the US. I thought that they were all locked to AT&T (I was just using http://www.apple.com vs http://www.apple.com/au). Apologies for my ignorance on that subject.

They are locked. You're correct.

They are contract-free though, different thing to unlocked. You can use them with whatever plan you like but it must still be with AT&T.

 

[WytRaven]

They are locked. You're correct.

They are contract-free though, different thing to unlocked. You can use them with whatever plan you like but it must still be with AT&T.

Ah ok gotcha.

 

[Jinkst]

Our iPhone prices in Australia actually aren't too bad. You can, and have been able to for a while, pick up a fully subsidised iPhone 3GS 16GB on a $69 p/month plan with VodafoneAU and Optus. That in comparison to some other handsets in Australia is very competitive.

Apparently our phone plans are rubbish compared to the rest of the world, but in our market that isn't a bad price.

As for the iPad, both VodaAU and Optus have looked at getting it on board when the 3G model comes out, and an educated guess (I used to work for Vodafone for years and still have contacts in HO who have confirmed they are looking at the iPad) would be you will be able to pick it up for $10 a month max on top of a higher end data plan.

 

[Chaos123x]

Besides cell phones with contracts and subs.

I think Apple ignores conversion rates so it will be 499 no matter what country.

 

[WytRaven]

Besides cell phones with contracts and subs.

I think Apple ignores conversion rates so it will be 499 no matter what country.

Well it would definitely be nice if that ends up being the case but I can't help but feel that with the evidence of other product prices that it's unlikely we will see a direct cross over like that.

...but here's hoping

 

[MagAustralia]

32GB version is $849

and you can't compare exchange rates with pricing of products in different territories, it has nothing to do with it.

 

[wackymacky]

Besides cell phones with contracts and subs.

I think Apple ignores conversion rates so it will be 499 no matter what country.

No, I doubt that.

They were able to do that with contracted iPhone's as the carrier could sell it for the low price.

i.e in New Zealand to get a $199 iPhone ($135 US) you had to sign a contract for $130 a month.

If they sell a iPad for $499 New Zealand dollars ($375USD), people would just sell them on e-bay for the profit.

 

[DoFoT9]

You've confused the iPhone prices. You need to compare contract-free iPhones in the US which start at ~US$499 for the 8GB iPhone 3G. This phone is still locked though so it's not a direct comparison.

I think we'll see:

iPad WiFi:

16GB: A$649
32GB: A$779
64GB: A$849

These don't crowd the iPhone prices because, to do a direct comparison with the US where the phone is $99 on a 2 year contract you'd need to compare the contracts here where the iPhone is typically free.

those prices seem somewhat reasonable. i am after the lowest wifi model - i reckon i can live with that price.

i hope you are right chund

 

[Bentron]

I agree with the Original Poster that because they had (i'm in the UK and it has now been taken down) the US prices, it will inevitably lead people to draw their own conclusions as to what the price will be. Apple isn't stupid. The prices on the page weren't a mistake on their part.

Although perhaps something can be said that the 'Price' tab has been removed since we learned of the shipping date. However, I am still hopeful of a competitive price. Apple still claims it'll be an 'unbelievable price', I hope so.

As for price, analysts here are saying the base model will be about £389, I expect £399, that extra £10 added just for fun.

 

[OllyW]

As for price, analysts here are saying the base model will be about £389, I expect £399, that extra £10 added just for fun.

That was before the value of the Pound plummeted over the last month. Apple UK always set their prices at the current exchange rate plus a bit!

Macworld UK now estimates the following UK pricing for the iPad at launch:

iPad Wi-Fi: £417 (16GB); £500 (32GB); £584 (64GB)

Wi-Fi + 3G: £526 (16GB); £610 (32GB); £693 (64GB)

http://www.macworld.co.uk/mac/news/index.cfm?newsid=3214362&pagtype=allchandate

 

[DoFoT9]

That was before the value of the Pound plummeted over the last month. Apple UK always set their prices at the current exchange rate plus a bit!



http://www.macworld.co.uk/mac/news/index.cfm?newsid=3214362&pagtype=allchandate

hmm intersting. do you know of any Aus predictions?

 

[Chundles]

hmm intersting. do you know of any Aus predictions?

Well, our dollar has gone up in the last month. It was around US$0.86 at the start of Feb but it now at close to US$0.91 so hopefully we're looking good for $649 or less entry price.

The last release of a product was Aperture 3, it's $US199 and A$249. Prior to that the US$199 to $A product translated to $268 (8GB iPod touch) so we've gained a bit of ground.

If we keep the dollar strong (everyone buy our coal and steel please *cough*and uranium*cough*) then we may even see $599 entry but that'd be stretching it a bit.

 

[DoFoT9]

Well, our dollar has gone up in the last month. It was around US$0.86 at the start of Feb but it now at close to US$0.91 so hopefully we're looking good for $649 or less entry price.

The last release of a product was Aperture 3, it's $US199 and A$249. Prior to that the US$199 to $A product translated to $268 (8GB iPod touch) so we've gained a bit of ground.

hmm well thats good. if we go off that "markup" of Aperature 3, $US199 = $A219, then add 10% to get to the actual australian selling price.

base price of wifi model is $US499, or $A549, add another 10% and you get $603. thats not too bad! id pay that

If we keep the dollar strong (everyone buy our coal and steel please *cough*and uranium*cough*) then we may even see $599 entry but that'd be stretching it a bit.

yes yes please do! buy stuff now i dont think the dollar has THAT much of an effect on the prices of things, i think apple would already have their own pricings setup based on how many units sold per country, country v country style... $599 would be bliss!

 

[Bentron]

That was before the value of the Pound plummeted over the last month. Apple UK always set their prices at the current exchange rate plus a bit!



http://www.macworld.co.uk/mac/news/index.cfm?newsid=3214362&pagtype=allchandate

Aww damnit! At least it is good news that, according to the article, that Apple are waiting 'til the closer to the launch before giving a price with international prices. Well I say good news, the value of the £ could fall further yet...

 

[sammich]

Far out, I close the wrong tab...I'll rewrite this post...

iPod Touch 8GB, released on 09/09/09, A$1 gets you USD$0.86 that day.

Price in Aus: $268 with GST, and in the US $220 (with a sample 10% sales tax).

So we paid an extra: 4.7% (268/220/0.86 ~ 104.7%)

Today the exchange rate is $0.90. With that above ratio we'll get:

x/499/0.9 = 104.7% (x being the price of the Aussie iPad 16GB)

x ~ $588

Therefore, price of the Aussie iPad 16GB will be $599.

Besides cell phones with contracts and subs.

I think Apple ignores conversion rates so it will be 499 no matter what country.

I'm sorry, but I can't believe I'm reading this. This is completely ignorant of just about every other currency in the world. How much then, would the price of the iPad be in Japan? 499¥ is AUD$6.01.

 

[WytRaven]

499¥ is AUD$6.01.

Sold!

 

[DoFoT9]

Far out, I close the wrong tab...I'll rewrite this post...

iPod Touch 8GB, released on 09/09/09, A$1 gets you USD$0.86 that day.

Price in Aus: $268 with GST, and in the US $220 (with a sample 10% sales tax).

So we paid an extra: 4.7% (268/220/0.86 ~ 104.7%)

Today the exchange rate is $0.90. With that above ratio we'll get:

x/499/0.9 = 104.7% (x being the price of the Aussie iPad 16GB)

x ~ $588

Therefore, price of the Aussie iPad 16GB will be $599.

genius! SOLD

 

[Xenoxide]

genius! SOLD

Wouldn't it make more sense to compare a like for like product? Such a comparison would already contain taxes, shipping, distribution, etc.

For example, in the US store, an Apple Time Capsule 2TB costs $499, the same price as the entry level iPad.

On the AU store, the Apple Time Capsule 2TB costs $649.

Therefore, it's logical that the iPad will start at $649 in Australia.

 

[sammich]

Wouldn't it make more sense to compare a like for like product? Such a comparison would already contain taxes, shipping, distribution, etc.

For example, in the US store, an Apple Time Capsule 2TB costs $499, the same price as the entry level iPad.

On the AU store, the Apple Time Capsule 2TB costs $649.

Therefore, it's logical that the iPad will start at $649 in Australia.

The online store in the US doesn't include individual state taxes, which vary from like 6 to like 10%.

But when you say 'like' you should compare to the same kind of product (one product could be a loss-leader...). You know...apple to apples? The iPod Touch is clearly the closest kind of product to the iPad: screen, flash storage, ARM chip, blah blah...

 

[Chundles]

Wouldn't it make more sense to compare a like for like product? Such a comparison would already contain taxes, shipping, distribution, etc.

For example, in the US store, an Apple Time Capsule 2TB costs $499, the same price as the entry level iPad.

On the AU store, the Apple Time Capsule 2TB costs $649.

Therefore, it's logical that the iPad will start at $649 in Australia.

That's the reasoning we originally used however the gap has slightly closed since the Time Capsule was revised. Apple don't generally revise prices mid-term unless newer models necessitate it so were the 2TB Time Capsule released today we may well see it at $599.

I still think $649 will be the price but there is a compelling case for $599.

 

[zipa]

Besides cell phones with contracts and subs.

I think Apple ignores conversion rates so it will be 499 no matter what country.

Might get mine from Thailand then. 499 Baht is, what, 10 bucks?

 

[Xenoxide]

The online store in the US doesn't include individual state taxes, which vary from like 6 to like 10%.

But when you say 'like' you should compare to the same kind of product (one product could be a loss-leader...). You know...apple to apples? The iPod Touch is clearly the closest kind of product to the iPad: screen, flash storage, ARM chip, blah blah...

It doesn't matter if it's a loss leader or not. The pricing will still be consistent internationally, even if the product is cheaper compared to Apple's normal pricing structures.

It also doesn't matter if the Time Capsule was revised. Revised pricing will be consistent across countries.

Nonetheless, lets have a look at an iPod touch.

US Apple Store 64GB iPod Touch - $399
AU Apple Store 64GB iPod Touch - $549

So in the US there's a $100 difference between the iPod touch and the iPad.

$100 is 25% of the US price.
25% of the AU price is $137.25.

$549+$137.25 = $686.25

Which is leaning towards $699, rounded up, or $649 rounded down. However I believe the pricing WILL be similar to the Time Capsule and the AU price will be $649.

I believe there is little to no chance it will be $599.