Why British iMac price increase is fair

[JavierP]

Regardless of any of that, a few days ago you could get an iMac for £750 (if memory serves), now you'll have to cough up an additional £200. That is bollocks.

http://finance.yahoo.com/echarts?s=...=on;ohlcvalues=0;logscale=on;source=undefined

You should have bought the mac a few days ago, or you should have betted against the pound in Jul-2008.
Another option is living in a third world country (such as mine) for a while, then return to the UK. You will get inmune against these sort of things and live a happy life

 

[The SpinDoctor]

Either way, my 1st Mac will now probably never materialise.

Its not like Apple can't afford making a little less profit.................

 

[BlizzardBomb]

OK then let's play the numbers game.

When the last revision was released in April last year, the exchange rate was £1 -> $2.
The base model for last revision was about £680 with VAT removed (17.5% back then). The iMac started at $1199.

£680 x 2 = $1360.

Now I expect rip-off Britain to add a fair bit on top of the US price, but it doesn't change the fact that last year, they were raking in roughly an extra $160 per low-end iMac sold. It was the same story across the line. Like the high-end model which cost $1,799.

£1,190 x 2 = $2,380.

Now if Apple made all that extra juicy profit last year, why can't they take a temporary hit? I'm not saying that I'm completely opposed to a price increase in the UK, but by the margin Apple has done it is plain ridiculous.

Oh and remember, people in the UK don't earn money relative to US dollars. £1 earned is still £1. So relative to the UK salary, the iMac has increased significantly.

P.S. The price of the baseline iMac before the update was £782 (15% VAT) so still £680 before VAT, not £652 as stated in the first post.

 

[G4DP]

All of those who are saying Apple is making the adjustment because of the exchange rate?

I've never known such a load of BS!

What happened to the prices when the it was £1 - $2.10. Low and behold apple increased the prices.

Anyone who thinks that Apple are doing this for reasons other than pure profit are deluded.

 

[Abstract]

OK then let's play the numbers game.

When the last revision was released in April last year, the exchange rate was £1 -> $2.
The base model for last revision was about £680 with VAT removed (17.5% back then). The iMac started at $1199.

£680 x 2 = $1360.

Now I expect rip-off Britain to add a fair bit on top of the US price, but it doesn't change the fact that last year, they were raking in roughly an extra $160 per low-end iMac sold. It was the same story across the line. Like the high-end model which cost $1,799.

£1,190 x 2 = $2,380.

Now if Apple made all that extra juicy profit last year, why can't they take a temporary hit? I'm not saying that I'm completely opposed to a price increase in the UK, but by the margin Apple has done it is plain ridiculous.

Oh and remember, people in the UK don't earn money relative to US dollars. £1 earned is still £1. So relative to the UK salary, the iMac has increased significantly.

P.S. The price of the baseline iMac before the update was £782 (15% VAT) so still £680 before VAT, not £652 as stated in the first post.

Are there import taxes that don't apply to US customers (since Apple is a US company)?

I'm fairly certain this explains the high European prices in the photography world, where European prices are far worse than they are in Japan and the US.

Now if Apple made all that extra juicy profit last year, why can't they take a temporary hit?

Well, they're a corporation and want to keep typical Apple margins of 40 to 45%. Other computer manufacturers like Lenovo and HP have margins of around 35 to 40% (excluding netbooks). They're ALL about making money. While I believe it was HP who said they were expecting to lower margins down to around 30% back in 2008 (other companies expected to do the same), I don't believe Apple made the same announcement.

I don't think they'd consider lowering their margins unless the market outlook they have at the beginning of the fiscal year is really bad. Even in a constantly economy, these companies know whether a market is going to be good or bad based on buying cycles. You'd expect purchases to be around the same each year if the economic conditions were held constant, but that's actually not the case.

Perhaps Apple thought they'd sell a lot of laptops anyway due to the new models, which all came out around the same time. I don't know, nor do I pretend to know why Apple hasn't lowered margins more in this economy. Perhaps they should.

 

[Kebabselector]

I'm fairly certain this explains the high European prices in the photography world, where European prices are far worse than they are in Japan and the US.

There's no import duty on digital cameras* in the UK and our prices are still crap for them.

*Only cameras, lenses have around 6% unless it's in a kit with a camera body. VAT is still payable on top.

Now, I wonder if Adobe will have the cheek to up their prices. Currently the $650/£560 for Photoshop is probably on parity. But it cost soooooo much to not regionalise the package for us they'll have to raise the price.

As for cameras Canon and Nikon seem to be reviewing prices monthly. Just as well I've got enough kit.

 

[JavierP]

OK then let's play the numbers game.

When the last revision was released in April last year, the exchange rate was £1 -> $2.
The base model for last revision was about £680 with VAT removed (17.5% back then). The iMac started at $1199.

£680 x 2 = $1360.

Now I expect rip-off Britain to add a fair bit on top of the US price, but it doesn't change the fact that last year, they were raking in roughly an extra $160 per low-end iMac sold. It was the same story across the line. Like the high-end model which cost $1,799.

£1,190 x 2 = $2,380.

Now if Apple made all that extra juicy profit last year, why can't they take a temporary hit? I'm not saying that I'm completely opposed to a price increase in the UK, but by the margin Apple has done it is plain ridiculous.

Oh and remember, people in the UK don't earn money relative to US dollars. £1 earned is still £1. So relative to the UK salary, the iMac has increased significantly.

P.S. The price of the baseline iMac before the update was £782 (15% VAT) so still £680 before VAT, not £652 as stated in the first post.

Since Apr-2008 until now the average pound/U$S relation was aprox. 0.6.
680 / 0.6 = 1133 U$S
So the average price in U$S was exactly the same

 

[Abstract]

Since Apr-2008 until now the average pound/U$S relation was aprox. 0.6.
680 / 0.6 = 1133 U$S
So the average price in U$S was exactly the same

No, he was right. It was $1 = £0.50 for the entire month. It actually fluctuated very very little (within £0.015) for around 2-3 months around that time. That's pretty amazing.


Go HERE and check from February 1st 2008 to May 1st, 2008.

 

[iBlue]

The pound used to be worth $1.90. Now it's worth $1.40. Do you really think Apple can or should ignore that?
...

What, you mean like they did when the dollar was worth squat and the pound gave them those huge profits?

I.e.,

OK then let's play the numbers game.

When the last revision was released in April last year, the exchange rate was £1 -> $2.
The base model for last revision was about £680 with VAT removed (17.5% back then). The iMac started at $1199.

£680 x 2 = $1360.

Now I expect rip-off Britain to add a fair bit on top of the US price, but it doesn't change the fact that last year, they were raking in roughly an extra $160 per low-end iMac sold. It was the same story across the line. Like the high-end model which cost $1,799.

£1,190 x 2 = $2,380.

Now if Apple made all that extra juicy profit last year, why can't they take a temporary hit? I'm not saying that I'm completely opposed to a price increase in the UK, but by the margin Apple has done it is plain ridiculous.

Oh and remember, people in the UK don't earn money relative to US dollars. £1 earned is still £1. So relative to the UK salary, the iMac has increased significantly.

P.S. The price of the baseline iMac before the update was £782 (15% VAT) so still £680 before VAT, not £652 as stated in the first post.

http://finance.yahoo.com/echarts?s=...=on;ohlcvalues=0;logscale=on;source=undefined

You should have bought the mac a few days ago, or you should have betted against the pound in Jul-2008.
Another option is living in a third world country (such as mine) for a while, then return to the UK. You will get inmune against these sort of things and live a happy life

Oh the "bigger picture" argument.




Of all the computer companies out there Apple is the only one to continually raise their prices while everyone else drops them. Especially in a recession this is a spectacular display of taking the piss. I am really glad I'm not looking to buy anything right now because I am not sure I would want to walk in backwards with my pants down ready for Apple's finest. Think Different indeed.

 

[Gloops]

All this talk of exchange rates would be relevant if Macs were built and assembled in the USA. What are the rates like with Taiwan/China?

The bottom line is, I was going to buy an iMac last week, now I'm not (unless I can find a refurb). The price has gone past my ceiling. A Mac just doesn't present value for money in the UK at the moment.

 

[iBlue]

All this talk of exchange rates would be relevant if Macs were built and assembled in the USA. What are the rates like with Taiwan/China?

The bottom line is, I was going to buy an iMac last week, now I'm not (unless I can find a refurb). The price has gone past my ceiling. A Mac just doesn't present value for money in the UK at the moment.

Actually the exchange rates of where they are assembled doesn't mean much in this context. (unless Apple were being charged more for assembly and export, but I don't think that's the case) It is down to the location of Apple headquarters, which is in the US.

 

[edesignuk]

All this talk about China...

Apple make all their crud for the UK in Ireland I believe, and have done for some time.

 

[bartelby]

All this talk about China...

Apple make all their crud for the UK in Ireland I believe, and have done for some time.

I just thougt it was the uk hq was based there. No manufacturing though.

Having actually looked it appears there's a plant in Cork.

 

[JG271]

I just thougt it was the uk hq was based there. No manufacturing though.

Having actually looked it appears there's a plant in Cork.

I had a G4 for a while that was made in Ireland. I'm fairly sure they've since moved almost everything to China however.

On topic - I'm not really surprised they have put their prices up here. Britain is becoming a cheaper place to buy things - so for a US company it only seems logical to put their prices up, so that profit in £s can relate to profit in $ - however expensive they may now appear. Not that I agree with the price increases of course. Hope that makes sense!

 

[OllyW]

All this talk about China...

Apple make all their crud for the UK in Ireland I believe, and have done for some time.

There's a little utility called coconutIdentityCard which can tell where your Apple stuff was made.

My iMac was made in Shenzhen, China and my MacBook Pro was built in Shanghai, China.

I think BTO Mac Pros are still configured in Ireland, but nearly all the other systems are now sourced from the far east.

 

[ClaphamChris]

Think the iMacs at least are made in the Czech Republic. Mine certainly was.

 

[cmcbridejr]

Of all the computer companies out there Apple is the only one to continually raise their prices while everyone else drops them. Especially in a recession this is a spectacular display of taking the piss. I am really glad I'm not looking to buy anything right now because I am not sure I would want to walk in backwards with my pants down ready for Apple's finest. Think Different indeed.

Of all the companies out there, Apple remains a very profitable company with steady growth and a solid stock value. Some people understand the value of the product that comes with the price.

 

[edesignuk]

Of all the companies out there, Apple remains a very profitable company with steady growth and a solid stock value. Some people understand the value of the product that comes with the price.

Everyone else has competition. Apple don't. As evidenced through their pricing.

 

[OllyW]

Of all the companies out there, Apple remains a very profitable company with steady growth and a solid stock value. Some people understand the value of the product that comes with the price.

Yes, but Apple has just raised their UK prices by up to a third when we are deep in the worst economic crisis for 20 years.

We can keep on arguing the justifications for the price increases but at the end of the day it's not unreasonable to expect the UK sales of Apple desktop products to be hit hard in the coming months.

It's great for a company to have huge profit margins but you still have to be able to sell the product to make any money.

 

[BlizzardBomb]

Of all the companies out there, Apple remains a very profitable company with steady growth and a solid stock value. Some people understand the value of the product that comes with the price.

Value and product do not belong in the same sentence when talking about the iMac in the UK. I love OS X, working daily with Windows then coming home to a Mac is a breath of fresh air every day, even on this old iMac G5 running Tiger. For OS X and the design of Macs, I would happily pay a fair bit over the equivalent PC.

But Apple wants £1,000 for a desktop with integrated graphics and as much as I love Apple, if they can't sort it out by next revision when I'm ready to buy, I may have to seriously consider my once certain purchasing plans.

It also seems funny that all these posts I've made about price really makes me sound like I have something stuck up my behind.

 

[djellison]

The pound used to be worth $1.90. Now it's worth $1.40. Do you really think Apple can or should ignore that?

Dell, Acer, Sony, Lenovo, Asus, Samsung - I don't see price hikes there. Why is Apple different?

Because it knows it can give its consumers the shaft, and get away with it.

 

[phalewhale]

All this talk about China...

Apple make all their crud for the UK in Ireland I believe, and have done for some time.

Never had anything from Ireland for years. All of my purchases since 2006 seem to have come from either China or Czechoslovakia.

Everyone else has competition. Apple don't. As evidenced through their pricing.

You got that SO SO right there. But I have been investigating the Ubuntu possibilities... I'm seriously tempted to put my iMac, new MB, and iPods up for sale on eBay. DELL have actually got a sale on at the moment - lasts until tonight I believe - so I'm thinking about buying an Open Source XPS machine. I really cannot stomach the new prices and feel that strongly about it. I really love OS X but I have to ask myself is it worth the price premium? Using Windows at work makes me feel it is, but using Ubuntu at work on my virtual machine makes me question the OS X premium. :s

 

[kastenbrust]

Never had anything from Ireland for years. All of my purchases since 2006 seem to have come from either China or Czechoslovakia

Czechoslovakia doesn't exist anymore. It hasn't existed for 16 years, since 1993.

The Apple plant in Ireland doesn't make the computers, it just assembles Mac Pro's from their component parts which are flyed over from China, as its cheaper for Apple to ship the component parts.

 

[iBlue]

There's a little utility called coconutIdentityCard which can tell where your Apple stuff was made.

My iMac was made in Shenzhen, China and my MacBook Pro was built in Shanghai, China.

I think BTO Mac Pros are still configured in Ireland, but nearly all the other systems are now sourced from the far east.

According to that it says our Mac Pro was made in Ireland. It got the dates right too.

 

[bartelby]

There's a little utility called coconutIdentityCard which can tell where your Apple stuff was made.

Helpful...

Think the iMacs at least are made in the Czech Republic. Mine certainly was.

When the iMacs were CRTs and fruity colours they were fabricated in Wales. I worked at the LG plant that made the tubes. I remember sneaking over to the iMac production lines at night to look.