Would Apple pull out of a country entirely?

[jb007clone]

If the Canadian dollar remains low, or continues to drop, do you think it is possible Apple would pull out of the country entirely?

The prices for new iOS devices are already sky high. I don't know how much more Apple can raise the numbers and continue to make a profit. Eventually it will just become too cost prohibitive to buy Apple and people will look elsewhere.

How does Apple deal with the sinking loonie?

 

[ApfelKuchen]

Not likely. Apple hasn't pulled out of Russia (among other places) where the currency is far worse off than the loonie.

They'll raise prices, and those who can afford will still buy. If there's a storm to be weathered, they stick it out, because this is cyclical, not permanent. Missing the next upturn (because they're not present in a market) can be far more costly than temporarily taking lower profits. It takes years to build market share in a country. Once you have it, you don't abandon ship at a whim.

 

[jb007clone]

They'll raise prices, and those who can afford will still buy.

True, but there will be a growing segment who can't afford. Why buy a $1000+ phone when you can get a similar product for a third of the price? The old answer used to be superior software/ecosystem, but Android isn't as far behind as it once was.

Once you have it, you don't abandon ship at a whim.

Well it depends on what you call a 'whim'. What if the storm to be weathered lasts years? Yes, the dollar will eventually rebound, but things will get very nasty in the interim. Cook said himself just two days ago that the economic condition in Canada, and a few other countries, is getting very extreme.

 

[ApfelKuchen]

The thing is, the future is unknowable. You can assume all you want, either on the side of optimism or pessimism. You can pick and choose indicators that will bolster your assertion, and disregard those that are contrary. Yet an unexpected circumstance can turn all those prognostications on their head.

One way or the other, some part of the world is always going through a rough patch while another is prospering. Multinationals succeed, in part, because "up" in one part of the world counterbalances "down" in another. You might as well wonder whether a company should simply quit doing business altogether if there's a global downturn. "Profits are lower than they once were, so why bother?" No. It's completely possible to operate profitably in very bad economies, and if you quit today, you won't be around tomorrow if/when things improve.

The only question is, "Is Apple a short-term, cut-and-run company, or does it have a long-term strategy?" The evidence is entirely against short-term. This is not the first time Canada (or any other of the dozens of nations where Apple has had a continuous presence for decades) has hit a rough patch. I'm not aware of any time that they've pulled out, there's no reason to suppose that this time is any different.

 

[jb007clone]

A good assessment, although simply keeping a presence and jacking up the price doesn't really seem like a long term strategy. More a stop gap solution.

 

[Tech198]

Apple would raise prices before they pull out.

 

[Michaelgtrusa]

Only if was/when war breaks out.

 

[Zirel]

The spice must continue to flow.

Seriously, how do you think that Canadians would react to that?

 

[Strider64]

I don't think Apple would pull out of Canada, but they'll probably not concentrate as much when it comes to marketing and promptness of new products as they do in other countries. I used to go to Florida to visit my parents and I was amazed on how many Canadians spent their winters down there. There were a lot of them which kind of tells me there are a lot of wealthy Canadians. I remember once helping a Canadian with a printer problem, I concluded the only thing wrong with the printer was it was out of ink, so instead of buying ink for the printer he bought a new printer (I even told all he had to do was buy the ink). He didn't even hesitate in buying a new printer and he didn't buy the cheapest printer either.

 

[Mr_Brightside_@]

As a tangent to this, after having worked specifically in Apple retail for years, I was always amazed at how little people remembered of prices.
Obviously, most aren't are informed as the majority of us here, but in many cases when Apple raised prices by tens or even hundreds of dollars, there would be grumbling for a week or two after the change (usually only because they had seen an item but not purchased it earlier), then most would go back to thinking that those prices had always been the norm.

 

[nebo1ss]

True, but there will be a growing segment who can't afford. Why buy a $1000+ phone when you can get a similar product for a third of the price? The old answer used to be superior software/ecosystem, but Android isn't as far behind as it once was.



Well it depends on what you call a 'whim'. What if the storm to be weathered lasts years? Yes, the dollar will eventually rebound, but things will get very nasty in the interim. Cook said himself just two days ago that the economic condition in Canada, and a few other countries, is getting very extreme.

When your currency falls all imports go up in price. People don't just stop buying the products. Nothing about this is unique to Apple.

 

[Danoc]

Question:

Apple raised the price twice last year in Canada.

The loonie has been back a bit to better level against the USD.

Any chances that we see Apple reducing the prices in the near future in Canada?

 

[maflynn]

How does Apple deal with the sinking loonie?

Its not apple that has to deal with it, but how do Canadian consumers deal with it. Apple will continue to raise the price to adjust for the difference with the dollar.