Will Apple fix Canadian prices!?

[notjustjay]

Future Shop is having a "sale". $50 to $100 off all Macs. Maybe this is the start of the price adjustment although its not really the Macs that are the problem.

I'm beyond the 14-day price protection available when I bought my new iMac (grr!) so I hope to call my credit card company and invoke their price protection policy (hopefully longer). The Future Shop sale is a good start ($40 off the iMac) but if Apple truly has reduced prices as the previous posters say, this is good news.

 

[Virgil-TB2]

Why should Apple lower their prices for what may be only a temporary fluctuation in the currency? It may make sense to show loyalty to Apple users and users to be in Canada... but that is unlikely to me, in the near future anyway.

It's not temporary though. It's a long steady climb, or a long steady decline depending on what side of the border you are on.

According to the experts I have been reading, it's unlikely the US dollar will go back up for a long while. The yen, the euro, and the canadian buck are all stronger than the US dollar now and probably will be for some time to come.

 

[CalBoy]

If the Canadian dollar does remain relatively high for an extended period, and the prices of imported goods begin dropping significantly, expect to hear concerns expressed about deflation, which is worrisome, because deflation would cause substantial hardships for Canadian manufacturing. In response, expect to see drops in interest rates and concerted efforts to stem the tide of a rising Canadian dollar. This happened in the US only a few years ago, so we know.

Interestingly enough, should deflation begin to occur, the Canadian central bank (I don't know what it's called over there; for us in the US, it's the Federal Reserve) may also choose to release more cash into the market via the purchase of securities from large holders. This would place more cash in the economy, and would lead to a moderate amount of inflation. The lower interest rates would naturally be a companion (and also a slight side effect) of such a move. As you said, it's happened a few times in recent years in the US, so Canadians, beware.

But I digress...

 

[IJ Reilly]

It's not temporary though. It's a long steady climb, or a long steady decline depending on what side of the border you are on.

According to the experts I have been reading, it's unlikely the US dollar will go back up for a long while. The yen, the euro, and the canadian buck are all stronger than the US dollar now and probably will be for some time to come.

While it's probably true that the US dollar is not going to recover much soon, in financial markets, everything is temporary. Not so many years ago, the GBP cost $2.50 US. Not so many years before that it was $4.00. During the '80s for a while the value fell to close to $1.00. For the last 15 years or so, it had been running between $1.50 and $1.75. Now that the GBP is back to around $2.00 US, a lot of Britons are suddenly asking "where's my discount?" Sorry, it doesn't work that way.

 

[IJ Reilly]

Interestingly enough, should deflation begin to occur, the Canadian central bank (I don't know what it's called over there; for us in the US, it's the Federal Reserve) may also choose to release more cash into the market via the purchase of securities from large holders. This would place more cash in the economy, and would lead to a moderate amount of inflation. The lower interest rates would naturally be a companion (and also a slight side effect) of such a move. As you said, it's happened a few times in recent years in the US, so Canadians, beware.

But I digress...

Digression is the name of the game.

Deflation is definitely a double-edged sword. Manufacturers in countries with strong currencies have to be worried about it, and so will their government economists. Back in the '80s, when the dollar was being crushed by the yen, the central bank in Japan stepped in to buy huge quantities of dollars. I would not be surprised to see a similar move come from European and other central banks.

 

[MacinDoc]

The "very different" prices are the result of the plunging US dollar, which is a recent event. The long-term value of the Canadian dollar, and prices of goods in those dollars, are the result of higher rates of inflation in Canada relative to the US over the course of several decades. It's highly unrealistic to expect these differences to be wiped out in a couple of months simply as a result of a change in exchange rates.

If the Canadian dollar does remain relatively high for an extended period, and the prices of imported goods begin dropping significantly, expect to hear concerns expressed about deflation, which is worrisome, because deflation would cause substantial hardships for Canadian manufacturing. In response, expect to see drops in interest rates and concerted efforts to stem the tide of a rising Canadian dollar. This happened in the US only a few years ago, so we know.

I cited the situation in the auto industry as an example of prices of goods being responsive to the markets where products are sold, not to costs of manufacturing or exchange rates on any given day.

When the Canadian dollar was dropping in value, Apple Canada adjusted its prices on an almost monthly basis...

 

[CalBoy]

Digression is the name of the game.

Deflation is definitely a double-edged sword. Manufacturers in countries with strong currencies have to be worried about it, and so will their government economists. Back in the '80s, when the dollar was being crushed by the yen, the central bank in Japan stepped in to buy huge quantities of dollars. I would not be surprised to see a similar move come from European and other central banks.

Yes, we could see this happen soon. The nations which use the Euro are undoubtedly seeing their export products become less and less competitive.

When the Canadian dollar was dropping in value, Apple Canada adjusted its prices on an almost monthly basis...

Remember though, that Apple wants most of its reserves to be in US Dollars. And, keep in mind that it's riskier for Apple to lower prices first. What if this Canadian dollar situation is very short term? Suppose that within six weeks it's back to how it used to be? Apple would be in a pickle then.

 

[MacinDoc]

Yes, we could see this happen soon. The nations which use the Euro are undoubtedly seeing their export products become less and less competitive.


Remember though, that Apple wants most of its reserves to be in US Dollars. And, keep in mind that it's riskier for Apple to lower prices first. What if this Canadian dollar situation is very short term? Suppose that within six weeks it's back to how it used to be? Apple would be in a pickle then.

Why? If Apple Canada has adjusted prices upward in the past, it will not hesitate to do so again.

Anyway, I can fairly confidently assure you that over the short to medium term, a reversal in the current currency trend will not occur. The current market fundamentals suggest that over the next 2 years, the Canadian dollar will likely reach $1.10 USD. Apple, as an international business, is well aware of this.

 

[IJ Reilly]

When the Canadian dollar was dropping in value, Apple Canada adjusted its prices on an almost monthly basis...

It's a conspiracy, clearly.

Yes, we could see this happen soon. The nations which use the Euro are undoubtedly seeing their export products become less and less competitive.

That, and pricing pressure from imports.

 

[CalBoy]

Why? If Apple Canada has adjusted prices upward in the past, it will not hesitate to do so again.

Apple is a business, and all businesses need a certain amount of "safety" built into their pricing structure. I don't care to debate this any further, so I'll leave you with this: Apple will continue to adjust their prices slowly but surely. It will take longer for them to lower their Canadian prices than it took them to raise them, and common sense will provide you with the reason why.

Anyway, I can fairly confidently assure you that over the short to medium term, a reversal in the current currency trend will not occur. The current market fundamentals suggest that over the next 2 years, the Canadian dollar will likely reach $1.10 USD. Apple, as an international business, is well aware of this.

No offense, but I'm not taking your assurances to heart. I'll trust the people with dozens of degrees who do this for a living with that information

It's a conspiracy, clearly.

Oh yes, I believe that I saw 007 going into a bank the other day...surely he was wreaking havoc on the world's currency market

That, and pricing pressure from imports.

Oh yes, got to love those imports. There so delicious, esspecially the ones from China with their lead and all

 

[MacinDoc]

My point isn't really so much that Canadian prices are inappropriate when a product is introduced (we actually got a break on iTunes when it was introduced in Canada), but that occasional price adjustments (every 3 months or every 6 months) would be reasonable for Apple Canada. The fact that the price on Mac Pros has not changed in more than 1 year is ludicrous, as the technology has aged and the Canadian dollar has appreciated significantly. In terms of U.S. dollars, a Mac Pro purchased in Canada now costs 15% more than it did when it was introduced last year, although its components cost significantly less than they did then. Apple Canada appears to have a policy of NEVER lowering the price of a product until it is revised. This is a big problem for products that are not frequently updated.

And I would not call it a conspiracy, but you could say that Apple Canada has benefited significantly from the change in exchange rates, and it does not have anyone pushing it to be competitive, because after all, no other computer can easily run OS X.

 

[CalBoy]

In terms of U.S. dollars, a Mac Pro purchased in Canada now costs 15% more than it did when it was introduced last year,

Why are you comparing things in USDs? Has the Mac Pro become more expensive for you? IE, have your wages fallen but the price on the Mac Pro hasn't? If not, then you don't have a genuine complaint. You can't always use the Dollar to compare prices. As long as, from a Canadian to Canadian perspective, the price hasn't gone up, you have nothing to worry about. Stop worrying about Apple Canada and come to the US for a vacation. You'll be able to travel around a lot more for a lot less now

 

[IJ Reilly]

And I would not call it a conspiracy, but you could say that Apple Canada has benefited significantly from the change in exchange rates, and it does not have anyone pushing it to be competitive, because after all, no other computer can easily run OS X.

Of course they've benefitted, but Apple still has to remain competitive with other computer manufacturers, and that's how they set prices. Remember, you're not spending (or earning) US dollars, you're spending (and earning) Canadian dollars. If you want to spend US dollars, you have to come here. As CalBoy suggested, it sounds like you need to take a vacation in the states!

 

[MacinDoc]

Of course they've benefitted, but Apple still has to remain competitive with other computer manufacturers, and that's how they set prices. Remember, you're not spending (or earning) US dollars, you're spending (and earning) Canadian dollars. If you want to spend US dollars, you have to come here. As CalBoy suggested, it sounds like you need to take a vacation in the states!

Have you recently compared the price of a Mac Pro with a comparable Dell at dell.ca? The Mac Pro is not competitively priced in Canada right now.

Also, remember that Apple Canada and Apple resellers are buying their inventory with U.S. dollars, so they are experiencing a windfall. Competition is discouraged because Apple does not allow resellers to sell for less than the MSRP.

BTW, a portion of many Canadians' income is in U.S. dollars. And in the long run, not keeping current with prices will hurt Apple Canada, because it is very easy for Canadians to cross the border and purchase goods in the U.S., and more and more of us will do so, as you have suggested. I very nearly bought an iMac on my most recent trip south of the border, but held up because I was expecting the new iMac at that time. In retrospect, I regret having waited.

Mind you, the iMac I picked up on eBay was a bargain compared to the refurb iMacs at the Canadian on-line store.

 

[flopticalcube]

but Apple still has to remain competitive with other computer manufacturers, and that's how they set prices.

No they don't. Other manufacturers change their prices constantly. Apple does not. Dell changes frequently by either revising models or dropping prices. HP and Sony likewise. Apple just sits there until a product is refreshed. This strategy worked for most products most of the time but cracks are beginning to show.

Of course, Apple could always revise the prices in the US up to reflect greater manufacturing costs. I hear inflation in China is nearly double digit now.

 

[IJ Reilly]

Have you recently compared the price of a Mac Pro with a comparable Dell at dell.ca? The Mac Pro is not competitively priced in Canada right now.

If that's the case, then they will be forced to lower the price sooner or later. Apple has to remain competitive.

No they don't. Other manufacturers change their prices constantly. Apple does not. Dell changes frequently by either revising models or dropping prices. HP and Sony likewise. Apple just sits there until a product is refreshed. This strategy worked for most products most of the time but cracks are beginning to show.

I just got through hearing how Apple promptly raised the prices in Canada when the US dollar gained strength. I wonder which story is true.

 

[flopticalcube]

I just got through hearing how Apple promptly raised the prices in Canada when the US dollar gained strength. I wonder which story is true.

Can't say about that. I was living abroad at the time. All I know is what Apple does now and that is revise prices when they revise products. Maybe when its in their favour they have a different policy.

 

[MacinDoc]

I just got through hearing how Apple promptly raised the prices in Canada when the US dollar gained strength. I wonder which story is true.

Back when I was in university, when I was saving to buy a Mac II, I remember going to the university's computer store every month to check on the latest Mac developments and see how close I was to buying my dream machine. Unfortunately, the price went up every time I went in. I finally bought my Mac II on the last day of January after hearing that the prices would be adjusted again the next day.

Things have changed a lot since then. The CDN dollar bottomed out and stayed at about $0.65 for quite a few years (couldn't afford to travel out of the country in those years). Then, over the last 3-4 years, it started to climb again.

Apple Canada has historically adjusted prices upward when necessary due to an unfavorable exchange rate. The opposite has not been true, and that is the basis of my complaint.

 

[trainguy77]

i can understand keeping it a little more expensive in canada in case of changes. However, the cdn dollar has been above what the prices reflect for a long time. Right now the prices are set as if the cdn dollar is worth 85-90 cents on the dollar. Atleast make the difference a little closer.

 

[CalBoy]

Apple Canada has historically adjusted prices upward when necessary due to an unfavorable exchange rate. The opposite has not been true, and that is the basis of my complaint.

But that has to do with being safe from a business perspective. Remember that you are not Apple's only customer. Suppose that there is a shift towards a falling Canadian dollar? This could lead to massive losses for Apple if they're not careful. Hence, the price will always adjust upwardly faster and adjust downwardly slower, because there is less inherent risk in a adjusting downwardly at a slower pace.

 

[IJ Reilly]

But that has to do with being safe from a business perspective. Remember that you are not Apple's only customer. Suppose that there is a shift towards a falling Canadian dollar? This could lead to massive losses for Apple if they're not careful. Hence, the price will always adjust upwardly faster and adjust downwardly slower, because there is less inherent risk in a adjusting downwardly at a slower pace.

Perhaps. But I think this decision is made on a somewhat more clear-cut basis, which is competitiveness. Underlying many of these gripes is the apparent assumption that Apple simply doesn't need to compete, that they can raise prices whenever it pleases them and never lower them no matter what happens in the market for similar goods. That's ridiculous of course. Apple may be able to get a premium price for their products, but that premium can't be stretched beyond a breaking point. You can bet your bottom Loonie that Apple has calculated that breaking point down to a fraction of a cent. If it's really true that every other US computer company is slashing prices to account for the weakened dollar (I have my doubts), then Apple will follow suit, eventually. They simply won't have any choice.

 

[CalBoy]

Perhaps. But I think this decision is made on a somewhat more clear-cut basis, which is competitiveness.

Oh, don't get me wrong, competition still plays a large part (the largest in fact) of it. However, I think all companies are cautious when it comes to volitile currency markets (like the one we're in now). Apple is simply one of many companies that is watching the currency market carefully (as evidenced by the lawsuit brought against American car companies). I was just trying to explain to Canadians that things aren't as simple as: USD goes down, so Canadian prices go down.

 

[flopticalcube]

I was just trying to explain to Canadians that things aren't as simple as: USD goes down, so Canadian prices go down.

Sorry Calboy, but that is a very patronising remark. Of course its not that simple, but when .Mac costs $139 here and $99 in the US, something just isn't right. On the old white iMacs, the extra 128MB of VRAM was US$150 and CAD$275 when the CAD was 85 cents US. Most of Apples products are fairly priced, some are outrageously not.

 

[CalBoy]

Sorry Calboy, but that is a very patronising remark.

Fair enough, but the main point stands true.

It would really help things if you could post some prices from companies like Sony and IBM in Canadian Dollars. Then it would be easier for us to see if Apple really is overcharging.

 

[IJ Reilly]

Oh, don't get me wrong, competition still plays a large part (the largest in fact) of it. However, I think all companies are cautious when it comes to volitile currency markets (like the one we're in now). Apple is simply one of many companies that is watching the currency market carefully (as evidenced by the lawsuit brought against American car companies). I was just trying to explain to Canadians that things aren't as simple as: USD goes down, so Canadian prices go down.

They also buy currency futures to hedge against volatility, in the same way airlines buy jet fuel futures. It may sound patronizing to say so, but I've been hearing many unrealistic expectations coming from people living in countries where currencies have become strong against the US dollar. They expect an instant discount, and that's just not a happening thing.