More international Apple pricing

“Dean W.”:http://virtuelvis.com/archives/2005/01/mac-mini-prices#cid1640 is asking us to take sales taxes (VAT) into account when reviewing the prices of the “Mac mini”:http://apple.com/macmini.
I have done just that, and calculated a new base price. The new base price is:

  The US base price, USD 499
+ Apple's higher margin
+ Any taxes added due to Apple's higher margins for foreign countries
= Adjusted price


h3. For Norway:
* The VAT/sales tax in Norway is 25%.
* Norwegian price, excluding VAT: NOK 3592 = USD 590.
* Difference = USD 91.
* Apple-added tax USD 24.
* Adjusted base price = *USD 614*
h3. for the UK:
* VAT: 17.5%
* UK price, excluding VAT: GBP 288.5 = USD 554.
* Difference: USD 55.
* Apple-added tax: USD 10
* Adjusted base price = *USD 564*
I am pretty sure that no sane US citizen would pay $614 for the Mac mini. Robert X. Cringely is arguing that the Mac mini price “should really be $249”:http://www.pbs.org/cringely/pulpit/pulpit20050107.html
h3. Optional add-ons
Apple’s unfair treatment of international customers extends further. Let’s review the “base prices” for the add-ons. (Norway only, I’m pretty confident that this is similar for other countries). All figures are USD.
h4. 512MB memory upgrade
* US price, excl. taxes: $75
* Norwegian price, excl. VAT: $84.2
* Price difference: $9.2
* Apple-added tax: $2.3
* Adjusted base price: $86.5
h4. SuperDrive option
* US price, excl. taxes: $100
* Norwegian price, excl. VAT: $113.1
* Price difference: $13.1
* Apple-added tax: $3.3
* Adjusted base price: $116.4
h4. Internal Bluetooth+AirPort Extreme
* US price, excl. taxes: $129
* Norwegian price, excl. VAT: $170.8
* Price difference: $41.8
* Apple-added tax: $10.5
* Adjusted base price: $181.3
h4. Wireless Keyboard+Mouse
* US price, excl. taxes: $99
* Norwegian price, excl. VAT: $111.4
* Price difference: $12.4
* Apple-added tax: $3.1
* Adjusted base price: $114.5
h3. High-end Mac mini?
So, if I live in Norway, and want to buy a higher-end Mac mini, how much will I pay? Let’s add up the options listed to the $599 Mac mini, and see what happens:
* US price, excl. taxes: $1002
* Norwegian price, excl. VAT: $1156.3
* Price difference: $154.3
* Apple-added tax: $38.6
* Adjusted base price: $1194.9
The actual, VAT included price in Norway for the $599 Mac mini configured with the options listed is *$1445.40.* You could buy a small country for that price..
h3. Related reading
* “Sign the petition for fair Mac mini pricing”:http://www.petitiononline.com/MacmiEU/petition.html
* “Apple fans up in arms over ‘unfair’ Mac mini pricing”:http://hardware.silicon.com/desktops/0,39024645,39127106,00.htm
* “European Mac fans call Mac Mini pricing unfair”:http://news.com.com/European+Mac+fans+call+Mac+Mini+pricing+unfair/2100-1041_3-5539290.html
* “Linkblog entry”:http://virtuelvis.com/archives/2005/01/european_mac_fans_call_mac_mini_pricing_unfair
* “The not-so-cheap Mac mini”:http://virtuelvis.com/archives/2005/01/mac-mini-prices

3 Comments

  1. Hey, why not demand US prices on cars – or gasoline, which we actually export? That way you could buy a Mac mini for every 15-20 refills or something.
    🙂

  2. The Register is doing a story on Apple pricing. It broadly gels with my own position, that the difference is due in large part to tax and import duties, isn’t usually very large, and that it helps protects Apple against a rise in the dollar in the next twelve months.
    The same article also raises the question of manufacturers combatting the grey market. The grey market is basically consumers (and resellers) buying a product from a multinational company in the territory in which that company sells its product for the least price. It’s how cdwow.com can sell CDs so cheaply.
    Lately, however, companies have been combatting this. The G5 iMac, for example, is the first iMac to have the power supply hardwired, making it impossible for a UK user to buy one from the US. European print-cartridges won’t work with US printers and vice-versa. And even cdwow.com was in trouble from a UK music operation, and had to temporarily raise prices. In CD-Wow’s case, I think they were bailed out by the expansion of the EU.
    With regard to Cringely’s article, selling units at a $100 loss is something Apple never will do: they’re into making money, and fair dues to them for doing so. It only puts them in a stronger position when it comes to development through research or acquisition.
    Incidentally, what is the “Apple-added tax?”

  3. bq. Incidentally, what is the “Apple-added tax?”
    Apple-added tax = Any taxes added due to Apple’s higher margins for foreign countries.
    For instance: The price, VAT excluded, for the Mac Mini in Norway is $590. $590-$499 = $91.
    The “Apple-added tax” is the extra taxation of 25 per cent of those 91 bucks that I suffer because of Apple’s foreign pricing policy.