Will Apple fix Canadian prices!?

[flopticalcube]

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.

Its not only patronising, its also a gross generalization. Apple may or may not have hedged their currency exposure using futures, forwards, options or swaps. Most international organizations would.

---------

In the spirit of fairness, and because I believe only some of Apples prices are out of line and not all, I decided to list everything that sells at par on the Apple Store that I could find:

BT MM $69
BT Keyboard $79
Wired Keyboard $79
Wired MM $49
iWork $79
iLife $79
iWork Family $99
iLife Family $99
Logic Studio Upgrade $199
Logic Studio $499
Aperture $299

Feel free to add.

Some prices are just WAY out of wack.

WebObjects US$699 CAD$1049.

 

[IJ Reilly]

Its not only patronising, its also a gross generalization. Apple may or may not have hedged their currency exposure using futures, forwards, options or swaps. Most international organizations would.

You can bet that Apple has hedged their currency exposures. Companies which sell in many countries have to insulate themselves from fluctuations in exchange rates if only to keep their costs predictable. I'm not sure what you mean by "gross generalization," but if you're referring to my observation that many seem to expect instant discounts, then you need look no further than this thread, and the many like them which have sprung up over the past few weeks. I don't remember hearing any Americans complaining that the price of Burberry raincoats in US department stores didn't drop when the GBP was on life support not so many years ago.

Your list of prices means very little, I'm afraid. As I've explained, the prices of goods are set in the market where the goods are sold. Apple, like any other company, will do with pricing what is necessary to both remain competitive and maximize their profits. If you think Apple products are priced way above the market for similar products in Canada, then by all mean, do not buy them.

 

[MacinDoc]

You can bet that Apple has hedged their currency exposures. Companies which sell in many countries have to insulate themselves from fluctuations in exchange rates if only to keep their costs predictable. I'm not sure what you mean by "gross generalization," but if you're referring to my observation that many seem to expect instant discounts, then you need look no further than this thread, and the many like them which have sprung up over the past few weeks. I don't remember hearing any Americans complaining that the price of Burberry raincoats in US department stores didn't drop when the GBP was on life support not so many years ago.

Your list of prices means very little, I'm afraid. As I've explained, the prices of goods are set in the market where the goods are sold. Apple, like any other company, will do with pricing what is necessary to both remain competitive and maximize their profits. If you think Apple products are priced way above the market for similar products in Canada, then by all mean, do not buy them.

If Apple Canada is not careful, that might just happen.

Take for example the following 2 systems, each with advantages and disadvantages, but with respect to hardware, approximately equivalent, and tell me why the Apple system costs more than twice as much (I hesitate to post this, because I am usually arguing how much value Apple products provide).

In Canada, Apple is not competitive, because it is both the manufacturer and the reseller, and it controls the prices other resellers are able to charge. If you want OS X, Apple is literally the only game in town.

BTW, nobody is expecting instant price adjustments, just, as I suggested earlier, adjustments where appropriate every 3-6 months. And the current currency situation is not just a brief unexpected fluctuation, but has been taking place over a number of years.

 

[Duff-Man]

Duff-Man says...of course, I don't recall anyone complaining when Apple did not adjust their prices upward right away a few years ago when the cdn dollar dropped like a stone - I was in the market for one of the curent iPods at the time and when factoring in the exchange rate it ended up being about $35 cheaper here in Canada rather than buying in US$$.

Also, I recall once when my .mac was up for renewal - normally I would shop around for the retail box at a discount price and use the enclosed code but this one particular year I was away travelling for a long period just when my renewal was due. Just before leaving I bit the bullet and renewed online through Apple and the cost at the time was $160cdn...however the real exchange rate at the time had been closer to about $140...when the renewal finally went through on the proper date about 3 weeks later Apple only charged me $139cdn as they has adjusted the price in the interim.

Lastly - I know we are talking about Apple here but it is an issue that affects all businesses here in Canada. Yeah, maybe Apple have not adjusted the price on everything yet but on the new products they've done the right thing and the rest will no doubt fall in line as time goes by. Other companies have done a helluva lot worse - I've been looking at a 'reasonably inexpensive" camera option - I want something easy to carry around when I travel and the ultra-zoom feature on a few has been a feature I am quite interested in. The Panasonic Lumix DMZ-FZ18 has been on my list of ones to check out...this is a very very recent release camera, in factr the black body version has just shipped over on this continent in the last couple weeks. The going rate in Canada is about $550 yet in the USA it can easily be had for $375 (not grey market or anything) - no excuse for that, and it just goes to show that Apple is far better than a lot of companies out there...oh yeah!

 

[MacinDoc]

Duff-Man says...of course, I don't recall anyone complaining when Apple did not adjust their prices upward right away a few years ago when the cdn dollar dropped like a stone - I was in the market for one of the curent iPods at the time and when factoring in the exchange rate it ended up being about $35 cheaper here in Canada rather than buying in US$$.

Also, I recall once when my .mac was up for renewal - normally I would shop around for the retail box at a discount price and use the enclosed code but this one particular year I was away travelling for a long period just when my renewal was due. Just before leaving I bit the bullet and renewed online through Apple and the cost at the time was $160cdn...however the real exchange rate at the time had been closer to about $140...when the renewal finally went through on the proper date about 3 weeks later Apple only charged me $139cdn as they has adjusted the price in the interim.

Lastly - I know we are talking about Apple here but it is an issue that affects all businesses here in Canada. Yeah, maybe Apple have not adjusted the price on everything yet but on the new products they've done the right thing and the rest will no doubt fall in line as time goes by. Other companies have done a helluva lot worse - I've been looking at a 'reasonably inexpensive" camera option - I want something easy to carry around when I travel and the ultra-zoom feature on a few has been a feature I am quite interested in. The Panasonic Lumix DMZ-FZ18 has been on my list of ones to check out...this is a very very recent release camera, in factr the black body version has just shipped over on this continent in the last couple weeks. The going rate in Canada is about $550 yet in the USA it can easily be had for $375 (not grey market or anything) - no excuse for that, and it just goes to show that Apple is far better than a lot of companies out there...oh yeah!

Agreed, the problem is far from limited to Apple. But that doesn't mean it isn't a problem, or that Apple Canada shouldn't be held accountable for it.

 

[Duff-Man]

Agreed, the problem is far from limited to Apple. But that doesn't mean it isn't a problem, or that Apple Canada shouldn't be held accountable for it.

Duff-Man says...yes, but what I was saying is that Apple *has* fixed/adjusted many of the prices where others have not bothered at all even with newly released items, and from that it is quite obvious that they know what is going on and the rest will fall into line shortly. Yeah, it does not mean people should stop questioning it either though. I think perhaps some of these adjustments that are overdue may come very soon and the refreshing of the product lines may play a part in this - for instance the Mac Pro - well (over)due for an update both to the specs and the price - is Apple Canada waiting because of updates coming in the near future? I am not defending them and I agree *all* the prices need to be looked at, I am just saying that it is obvious they are aware of it from the pricing on new items and the rest of their catalogue is something that will probably be dealt with relatively soon....oh yeah!

 

[usc2k]

Canada should feel lucky

A 16gb iPod touch in Spain (389€) comes out to $554 US. Canadian comes out to $450 US. I'll take the Canadian pricing any day!

 

[LeKiD]

A 16gb iPod touch in Spain (389€) comes out to $554 US. Canadian comes out to $450 US. I'll take the Canadian pricing any day!

Don't you have a double taxation system in Spain as in Canada? it's actually 335 euros without IVA... which make the ipod touch 475$ CAN... than taxes take over.

 

[IJ Reilly]

Agreed, the problem is far from limited to Apple. But that doesn't mean it isn't a problem, or that Apple Canada shouldn't be held accountable for it.

It isn't a "problem" and nobody should be "held accountable." This is purely a market issue, not a mistake or a conspiracy.

Forget Apple for a minute. Forget US and Canadian dollars. Using the Burberry raincoat example above. Say the coat sells for $300 in New York City, and £200 in London, with the exchange rate at $1.50. The GBP devalues to $1.00. Should we expect the price of the coat in New York City to drop to $200? No. The market rate for luxury raincoats in New York City is still $300. This is what people in New York were willing to pay for them before, a fact which does not change because of the drop in the GBP. If a person wanted to buy the coat for $200, they'd need to get on an airplane and fly to London.

It works the other way, too. If the GBP rose instead of fell, Burberry would be forced to eat the difference for as long as possible, not raising the price of the coat in New York for fear of losing market share to other luxury raincoat manufacturers. Pricing is all about markets, and only incidentally about currency exchange rate.

 

[notjustjay]

So..... the guys who said they saw Mac prices coming down in Canada..... were mistaken?

 

[MacinDoc]

Forget Apple for a minute. Forget US and Canadian dollars. Using the Burberry raincoat example above. Say the coat sells for $300 in New York City, and £200 in London, with the exchange rate at $1.50. The GBP devalues to $1.00. Should we expect the price of the coat in New York City to drop to $200? No. The market rate for luxury raincoats in New York City is still $300. This is what people in New York were willing to pay for them before, a fact which does not change because of the drop in the GBP. If a person wanted to buy the coat for $200, they'd need to get on an airplane and fly to London.

Yes, we should expect the cost of the coat to drop in New York, if the cost of the USD increases relative to where the coat is made. Global market forces do have am impact on local economies.

It works the other way, too. If the GBP rose instead of fell, Burberry would be forced to eat the difference for as long as possible, not raising the price of the coat in New York for fear of losing market share to other luxury raincoat manufacturers. Pricing is all about markets, and only incidentally about currency exchange rate.

You can bet that they won't sell raincoats at a loss in New York just to maintain market share.

In any case, you seem to be missing the point. Apple is not selling Mac Pros in Canada at the market price for quad core desktops. Comparable non-Apple systems can be purchased for half the price of a Mac Pro. This is a problem both for consumers and for resellers, especially those in Toronto whose customers will now start taking the short drive across the border to make their purchases. In the end, Apple will pay the price for its pricing strategies, with a shrinking market share, as fewer and fewer people remain willing to pay exorbitant prices just for OS X. It's no wonder that Apple's market share is lower everywhere else in the world than it is in the U.S.

.Mac is another example. Too bad Canadians can't purchase .Mac from the U.S. on-line store - here is absolutely no justification for it to cost 40% more in Canada.

 

[IJ Reilly]

Yes, we should expect the cost of the coat to drop in New York, if the cost of the USD increases relative to where the coat is made. Global market forces do have am impact on local economies.

But the price will not go down, unless competitive pressures demand it. In fact this happened about 25 years ago. For as long as it lasted, lots of Americans flew to London to buy British goods like Burberry raincoats which despite the drop in the GBP still cost a lot more in the US.

You can bet that they won't sell raincoats at a loss in New York just to maintain market share.

Probably not at a loss, but they will absorb as much of the difference as they can for as long as they are able. Canadian manufacturers are being faced with this problem right now. They can't simply raise prices on their goods in the US to make up for the change in exchange rate, because they risk becoming uncompetitive. They're taking a hit. They really have no choice.

In any case, you seem to be missing the point. Apple is not selling Mac Pros in Canada at the market price for quad core desktops. Comparable non-Apple systems can be purchased for half the price of a Mac Pro. This is a problem both for consumers and for resellers, especially those in Toronto whose customers will now start taking the short drive across the border to make their purchases. In the end, Apple will pay the price for its pricing strategies, with a shrinking market share, as fewer and fewer people remain willing to pay exorbitant prices just for OS X. It's no wonder that Apple's market share is lower everywhere else in the world than it is in the U.S.

.Mac is another example. Too bad Canadians can't purchase .Mac from the U.S. on-line store - here is absolutely no justification for it to cost 40% more in Canada.

I'm afraid you are missing the point, which again is that comparing prices in the US and Canada for the same goods at the current exchange rate is an absolutely useless exercise. The only comparison which is actually meaningful is comparing the prices of similar goods within Canada. If Apple is over that market, then and only then, will they lower their prices in Canada. It seems they've already done so on some products and may do so on other products, but this has little or nothing to do with exchange rates and has everything to do with the market price for goods in Canada.

 

[flopticalcube]

Using your raincoat example, I would expect the cost of the raincoat to go up in London, not down in New York. Why? If the pound devalues, as the US dollar is doing now, imported inflation will increase. Therefore, the price of the coat, in London, will go up.

Maybe we should expect the price of Apple products to increase in the US due to the davaluing dollar rather than decrease elsewhere.

Canadian manufacturers should take this as an opportunity to improve their efficiency by buying (now) cheaper equipment from abroad. Somehow, I doubt they will.

 

[CalBoy]

Using your raincoat example, I would expect the cost of the raincoat to go up in London, not down in New York. Why? If the pound devalues, as the US dollar is doing now, imported inflation will increase. Therefore, the price of the coat, in London, will go up.

Maybe we should expect the price of Apple products to increase in the US due to the davaluing dollar rather than decrease elsewhere.

Canadian manufacturers should take this as an opportunity to improve their efficiency by buying (now) cheaper equipment from abroad. Somehow, I doubt they will.

But we don't know if the Pound was falling against those currencies which supplied the raw materials for the coat Just because the Dollar falls against one currency doesn't mean it falls against all others (though it has been doing so lately).

 

[IJ Reilly]

But we don't know if the Pound was falling against those currencies which supplied the raw materials for the coat Just because the Dollar falls against one currency doesn't mean it falls against all others (though it has been doing so lately).

Which is why I used the example of a product manufactured and sold in the same country. Last I checked, the British were not importing much wool.

Incidentally, the price of the coat might have increased in Britain, but not because the GBP was being devalued. It, along with everything else, might increase in price in Britain if the cause of the GBP devaluation was inflation in Britain.

Probably one of the mistakes being made here is thinking of every good as though it was a commodity. Commodities do respond much more rapidly to changes in exchange rates because a pound of sugar is a pound of sugar, and a barrel of oil is a barrel of oil. They are fungible goods. Neither Apple computers nor Burberry raincoats are commodities.

 

[CalBoy]

Which is why I used the example of a product manufactured and sold in the same country. Last I checked, the British were not importing much wool.

Yes that would make sense wouldn't it?

Incidentally, the price of the coat might have increased in Britain, but not because the GBP was being devalued. It, along with everything else, might increase in price in Britain if the cause of the GBP devaluation was inflation in Britain.

Probably one of the mistakes being made here is thinking of every good as though it was a commodity. Commodities do respond much more rapidly to changes in exchange rates because a pound of sugar is a pound of sugar, and a barrel of oil is a barrel of oil. They are fungible goods. Neither Apple computers nor Burberry raincoats are commodities.

OK, now you're just making too much sense

 

[orangedude]

The Apple Canada store pricing isn't so bad right now actually. Ipod Touch 8GB is only $329 compared to the $299 in the US while 16 GB is $450 vs $399. I can deal with the ~10% overhead for buying in Canada.

 

[SpaceJello]

The Apple Canada store pricing isn't so bad right now actually. Ipod Touch 8GB is only $329 compared to the $299 in the US while 16 GB is $450 vs $399. I can deal with the ~10% overhead for buying in Canada.

Don't forget to add in GST and PST. When the two currencies are almost at par, and no forseen future of exchange rate reversal, Apple, along with MANY companies need to reconsider their pricing.

 

[CalBoy]

Don't forget to add in GST and PST. When the two currencies are almost at par, and no forseen future of exchange rate reversal, Apple, along with MANY companies need to reconsider their pricing.

I'm assuming that those are taxes. What kinds are they specifically?

 

[Chrystal Ocean]

Apple and other retailers aren't responsible for adjusting for Canadian taxes. For me, that isn't part of the issue re differential charges for the same goods.

Wouldn't the simplest solution be for Apple and other retailers to charge for all consumer goods in US dollars, rather than maintaining separate online stores in the various domestic currencies? Customers always have to pay via credit card anyway, in which case the exchange rate would take care of any adjustments necessary.

 

[MacinDoc]

The only comparison which is actually meaningful is comparing the prices of similar goods within Canada. If Apple is over that market, then and only then, will they lower their prices in Canada. It seems they've already done so on some products and may do so on other products, but this has little or nothing to do with exchange rates and has everything to do with the market price for goods in Canada.

In the case of the Mac Pro, it IS considerably over market value.

In the case of other products, it is relevant in Canada, because Canadian retailers will lose out, and will eventually stop selling Apple products, because it is so easy for customers to go across the border to buy. Poor availability of Mac products is already a problem in Canada (terrible selection of software), and this will only get worse.

Of course, we can also use eBay, which is how I bought my iMac. Doesn't do much for Canadian retailers, though.

Anyway, we all seem to be rehashing the same points, and since it is apparent that we will not agree, if you will excuse me, I will join another thread. Thanks for your input, everyone!

 

[SpaceJello]

I'm assuming that those are taxes. What kinds are they specifically?

GST = Goods and Services Tax = 6% Nation Wide
PST = Provincial Sales Tax = 5 to 10% depending which province you are in.

Apple and other retailers aren't responsible for adjusting for Canadian taxes. For me, that isn't part of the issue re differential charges for the same goods.

Wouldn't the simplest solution be for Apple and other retailers to charge for all consumer goods in US dollars, rather than maintaining separate online stores in the various domestic currencies? Customers always have to pay via credit card anyway, in which case the exchange rate would take care of any adjustments necessary.

Banks and credit card companies charge a premium each time you convert currency. Majority of the time, it's a rip-off to the customer in any country. Hence there is a reason for shopping in domestic currencies.

When I mentioned Canadian taxes, it has nothing to do with Apple or other retailers. I just want to bring to light that if you buy the same thing in the US and Canada even if they are priced according to currency exchange rates, you will get a big tax added on in Canada (but with good cause - the health care, etc).

 

[CalBoy]

GST = Goods and Services Tax = 6% Nation Wide
PST = Provincial Sales Tax = 5 to 10% depending which province you are in.

My that's a lot of tax. No wonder you guys want to come down here to get your stuff

 

[flopticalcube]

G
PST = Provincial Sales Tax = 5 to 10% depending which province you are in.

PST is 0% in Alberta.

 

[Dybbuk]

My that's a lot of tax. No wonder you guys want to come down here to get your stuff

Yeah, well, if I get sick or need an operation I'm in a better place than a lot of Americans.