Steve Jobs Weighs in on iPad International Pricing and Taxes

[Supernicklas]

The iPad is 500 USD in the US. The Joojoo is 500 USD in US.

The iPad is 500 euros in Europe at launch overhere, and the Joojoo is (from their website) 380 euros. Then why is that?

 

[Anuba]

Let's see how honest you are --- since you are running your own firm.

Are you reducing your prices as soon as your suppliers reduced their costs? Or do you pocket the difference?

99.9% of the businesses out there pocket the difference.

I'm sure I could respond to that if I ran a store or manufactured something, but I'm a freelance graphic designer working exclusively for Swedish clients so there are no exchange rate fluctuations involved and I don't have any "suppliers". My running costs are limited to buying computers and software, those costs go up and down over time but I never muck around with my hourly rates because of it.

I also don't see what suppliers reducing their costs has to do with Apple in this case. I don't expect them to drop prices due to reduced manufacturing costs. This was about linking the retail prices on foreign markets with exchange rates, something many companies do to make sure they're not screwing over customers abroad. Sometimes they even have to lower their prices on one market to compensate for that particular market's currency going down the drain. I have Swedish clients who make products that are very popular in the US, and when the USD was at its all-time low near the end of the Bush era, American customers were freaking out because the EUR price was suddenly much lower than the USD price – something they weren't used to. Since the American customers insisted they were being screwed (clearly not aware of the miserable state of their own currency), the company felt obliged to temporarily sell their products to the US distributor at a near-loss in order to keep the USD prices reasonable.

The iPad is 500 USD in the US. The Joojoo is 500 USD in US.

The iPad is 500 euros in Europe at launch overhere, and the Joojoo is (from their website) 380 euros. Then why is that?

Something to do with Apple being US based and Fusion Garage being India/Singapore based?

 

[Ibjr]

The iPad is 500 USD in the US. The Joojoo is 500 USD in US.

The iPad is 500 euros in Europe at launch overhere, and the Joojoo is (from their website) 380 euros. Then why is that?

Because Fusion Garage is a startup that does not have a lot of expertise in the price setting field. It is a sketchy startup that will not be around long, they are clearly not setting prices at a level that would allow them to do business in Europe where they would actually comply with the consumer protection laws.

 

[samab]

The iPad is 500 USD in the US. The Joojoo is 500 USD in US.

The iPad is 500 euros in Europe at launch overhere, and the Joojoo is (from their website) 380 euros. Then why is that?

Because Joojoo is a small start-up with zero assets that is trying to sell their products via internet. The first batches are in the hundreds of units --- no government is going to nail them for tax issues.

 

[Hal Itosis]

Unless you actually saw the email that was sent to Steve I think it is unfair for you to comment. The question could have been just as rude or worse.

+∞

Without that context, all these judgmental opinions are meaningless.
[it's quite possible that Steve's response was spot on (or generous even).]

 

[marksman]

Considering the guy in the iPad forum who got banned from Apple for life from buying iPads was selling them to his friends at what he claims was almost no profit for $650 US, it seems the european pricing is not out of line.

I am sure when some European Computing firm comes out with the first earth shattering tablet device, say from Kumquat Computers, us in the US will have to pay more for it too.

 

[samab]

I also don't see what suppliers reducing their costs has to do with Apple in this case. I don't expect them to drop prices due to reduced manufacturing costs. This was about linking the retail prices on foreign markets with exchange rates, something many companies do to make sure they're not screwing over customers abroad. Sometimes they even have to lower their prices on one market to compensate for that particular market's currency going down the drain. I have Swedish clients who make products that are very popular in the US, and when the USD was at its all-time low near the end of the Bush era, American customers were freaking out because the EUR price was suddenly much lower than the USD price – something they weren't used to. Since the American customers insisted they were being screwed (clearly not aware of the miserable state of their own currency), the company felt obliged to temporarily sell their products to the US distributor at a near-loss in order to keep the USD prices reasonable.

You do see it in Apple's SEC filings that they sometimes lost tens of millions of dollars on currency fluctuations.

 

[gnasher729]

The iPad is 500 USD in the US. The Joojoo is 500 USD in US.

The iPad is 500 euros in Europe at launch overhere, and the Joojoo is (from their website) 380 euros. Then why is that?

Someone at Apple can do maths. Someone at whatever company builds Joojoo can't do maths or is just as stupid as some UK posters who don't know about VAT. Or maybe Joojoo is breaking the laws in some European countries and advertises their prices excluding VAT (illegal in Germany for example for any goods that are likely to be bought by consumers). Or maybe Joojoo is made from really cheap parts and they are ripping off the Americans.

 

[dm2]

The iPad is 500 USD in the US. The Joojoo is 500 USD in US.

The iPad is 500 euros in Europe at launch overhere, and the Joojoo is (from their website) 380 euros. Then why is that?

so buy Joojoo, whatever it is

 

[gnasher729]

I know this is off-topic, but if you have universal healthcare why would you pay ANY health insurance premiums? Here in the UK there is little difference in quality between public and private healthcare. The only difference is speed; hence why some businesses pay health insurance for their workers - to get them back to work quicker.

My private story about that: Some years ago I needed an operation (in the UK). Nothing major, but I was obviously quite worried. I looked around on the Internet and found this place that explained exactly what horribly useless and awful bodge job the NHS would do for free, and what excellent treatment they would give me instead for £1200.

Next day I talked to my GP about it and he laughed and told me that the NHS treatment this site described hadn't been done anywhere by the NHS since the 1950's. Also that if you do any private operation and something goes wrong, they will put you straight into NHS emergency to fix their mess.

 

[bobbytallant]

From his words, what Steve apparently fails to realise is that the UK market for Apple products is frail - not least because of the obvious economic challenges that people face today when even thinking about attempting to buy lavish goods like the iPad - but also because this is what it is - an entry level product, the type of which Apple proudly confesses the world has never seen the likes of.

This 'magical' new thing is a hard concept to grasp for many people, perhaps even more so for us Brits who, in my opinion, are not bound by the same Apple popular pull as what the US consumer market is. For Steve to kind of belittle the UK consumer who feels aggrieved by the announced prices seems quite presumptuous and yes, rude frankly.

But yes of course I am still buying lol.

 

[mcmlxix]

The Taxman

As someone else correctly stated, sales tax varies not just by state but by county.

It gets even more granular than just by state and county.

The city of Chicago has a 10% tax, but most surrounding suburbs are lower. I would go out of the city to buy things. Paradoxically, Chicago looses out on tax revenue, because its rates are so high.

Also in Minneapolis tax rates can vary depending on the neighborhood. I live and work downtown which has a special excise supposedly to pay for things like the convention center and stadium. This additional tax is supposed to be levied only on hospitality, but the things they consider hospitality is broad indeed. At least we have no tax on clothes and unprepared food here.

Now the city has farmed out some services to local business associations like the DID. I like this idea generally, but even though they're not paid for by tax, I'm sure the businesses are passing along the costs, which are then taxed by the city again so to speak.

Question: countries with a VAT don't have sales tax, but do they have no property and income tax as well? Neither of these would directly factor in the costs of goods and services. Though indirectly they would be passed on.

 

[budselectjr]

No, I think he's saying that other companies do it, so what's Apple's excuse?

Um, they want to maximize shareholder value.

 

[JediZenMaster]

I have Swedish clients who make products that are very popular in the US, and when the USD was at its all-time low near the end of the Bush era, American customers were freaking out because the EUR price was suddenly much lower than the USD price – something they weren't used to. Since the American customers insisted they were being screwed (clearly not aware of the miserable state of their own currency), the company felt obliged to temporarily sell their products to the US distributor at a near-loss in order to keep the USD prices reasonable.

So are you saying apple should take a hit and sell products at a loss just to make them the same prices everywhere? Because other companies don't do this so why should apple be expected to?

Does dell , HP , Gateway , etc do this?

 

[Thex1138]

So we got a pretty good deal here in Australia.

 

[Anuba]

Um, they want to maximize shareholder value.

How does that maximize shareholder value long-term?

Seizing the opportunity to pocket the exchange rate surplus when competitors don't do the same means that Apple products will be disproportionately expensive in that particular market, which results in decreased sales.

The Swedish company I referred to makes software that competes with American products. If they hadn't lowered the price to compensate for the rock bottom value of the dollar, it would've meant that their American competitors would've gained market share because the Swedish product had just become too expensive. If you lose market share with a software product you lose tons of future revenue for all the paid upgrades you would've sold in the future.

Lowering the price means more units sold which means maintained or increased market share, which in Apple's case generates more sales of accessories and software, more future sales and other positive side effects.

I'm sure some shareholders would prefer the short sighted solution to make more money NOW (maybe they think it's the last day on Earth or something), but hopefully most can see beyond that.

Does dell , HP , Gateway , etc do this?

Can't speak for Dell worldwide but Dell Sweden's prices go up and down a lot, as if they were locked to currency fluctuations or supplier prices or something. They seem to change every week. Apple's prices never change unless there's a product refresh, they seem to recalculate the rates when that happens, but never inbetween releases. This can sometimes lead to bizarre consequences, for example last year when the MBP 17" was released a few months before the updated 13" and 15". Or was it the other way around? Either way, one of them had a price set when the USD was low against the SEK and the other when it was high against the SEK. This resulted in the Swedish Apple Store having a price for the MBP 17" that was on par with the US price, while the other models were way off, which meant the price difference between 15" and 17" was so low people were scratching their heads wondering what on earth was so special about the 15", if it was gold plated or something.

 

[mr.steevo]

At least Steve did not resort to that ubiquitous customer service platitude "Sorry for any inconvenience caused" - so often heard, but so totally lacking any sincerity.

It seems the world has become very sensitive to anyone's comments. I personally think Steve is being succinct, not rude. Again, in a world of waffle it is refreshing to see someone getting to the point and lets face it, Simon Cowell makes a living out of it, so come on, move on.

VAT, import duties, cost of operations, local business tax, cost of living etc all impact of setting a price point in any country. Gasoline/Petrol is a great point case.

Amen.

I've emailed Steve and he replied just as kurtly, but the product I commented on was changed as I suggested. I really don't need the "Thank you for your interest in our product. As a valued customer we...blah blah BS BS"

s.

 

[3282868]

Apples, oranges and pears.
CLIP

You've had so many different stories about your life and Apple "experiences" I doubt about everything you state. You have a self proclaimed bias against Apple yet frequent an Apple fan site... for years. Doesn't. Make. Sense.

 

[Anuba]

You've had so many different stories about your life and Apple "experiences" I doubt about everything you state. You have a self proclaimed bias against Apple yet frequent an Apple fan site... for years.

That's right. I'm not really a graphic designer from Sweden who uses Apple products, and my personal experiences such as the abysmal support and service on my iMac were entirely fabricated! In reality I'm a Microsoft shill from Texas who has a cunning plan to destroy Apple by typing really really fast!

...and 20 other bizarre conspiracy theories only a true fanboy could dream up...

 

[budselectjr]

I'm sure some shareholders would prefer the short sighted solution to make more money NOW (maybe they think it's the last day on Earth or something), but hopefully most can see beyond that.

Time value of money. Better to have money now than later.

 

[3282868]

That's right. I'm not really a graphic designer from Sweden who uses Apple products, and my personal experiences such as the abysmal support and service on my iMac were entirely fabricated! In reality I'm a Microsoft shill from Texas who has a cunning plan to destroy Apple by typing really really fast!

...and 20 other bizarre conspiracy theories only a true fanboy could dream up...

The moment I read "fanboy" I thought to myself, 16, maybe 17 at most.

...and is this the iMac that doesn't work and you refused to drive 2 hours to Stockholm to "fix" or the same iMac your "girlfriend" uses or... I forgot, so many stories...

...wow look at that time, I have things to do, like, read the news and some facts, I'll leave my fiction to John Grisham...

 

[Jonny1989]

hopefully the ipad is in stock when i go to florida in 2 weeks.

17% VAT is horrible, however we had a good break were it dropped 15% last year. Sometimes i think the government are too generous. On a serious note, for things like this i wish i was american.

 

[Anuba]

The moment I read "fanboy" I thought to myself, 16, maybe 17 at most.

...and is this the iMac that doesn't work and you refused to drive 2 hours to Stockholm to "fix" or the same iMac your "girlfriend" uses or... I forgot, so many stories...

Ah yes, I remember you now. You're the guy who tries to weasel your way out of discussions you have little chance of winning by trying to discredit opponents, by mumbling insinuations about how "suspicious" their posts are and how "fishy" it is that they registered on this or that date, and use quotation marks generously to underscore how "suspicious" the "story" about the "experience" is.

You can roll your eyes at fanboy allegations all you want, but that is the very essence of a fanboy. You can't accept the notion of Apple being at fault in any way, so rather than admit that they're not perfect you accuse people of lying. Do you realize how pathetic that is?

Yes, I have an iMac. Yes, it broke down. Apple Sweden wouldn't hear of repairing it on site or sending it in. So I drove it to an Apple Premium Reseller in Västerås. They took two weeks to repair it, replacing the supposedly "burnt" GPU and the power supply. I picked it up. I used it for less than a day. It broke down again (pressing the power button did nothing 99 times out of 100, just like before). I drove it back to them. They had it for a week, insisted there was nothing wrong. I picked it up. Still broken. I called AppleCare and said I can't deal with this crap anymore. They felt it called for special treatment and gave me an address in Stockholm where I could finally send in the damn thing instead of driving it somewhere. The shop called me and said heck yeah this thing is broken, but we fixed it now. They express shipped it to me, and now it's been running fine for several months. End of story. My point, at the time, was that it sure was a lot easier when I had Dell computers and could just call a number and have someone over the next day. That's all. I also have a Mac Mini and an MBP 17", and never had any problems with those at all. The end.

Now, if you have any further "doubts", "suspicions" or other objections you want to vent, feel free to PM me so I can give you the AppleCare case number, scanned images of the various receipts and other papers involved, pictures of the iMac, the box, my car, and any other "proof" you need to see in order to stop crying, perhaps my birth certificate or my family tree. OK?

 

[3282868]

snip

I read the first few words of your post and realized if you really have an issue take it up in a private message. FYI I wasn't and am not the only guy who calls you on your b.s. so trying to discredit me is a waste of your time. What's more pathetic, being a "fanboy" or someone who spends their time on a fan based site for a company whose products they continually post negative remarks on for years?

Type all the paragraphs you want, all it shows is you're attempting to dig yourself out of a grave. If you truly were honest you wouldn't care, and speaking of not caring, I'm done with you. Moving on.

 

[jons]

On a serious note, for things like this i wish i was american.

OMG, somebody copy this down and send it to our Government. Not long until we have a VAT here... America? What America?