posted by Thom Holwerda on Sun 5th Mar 2006 21:32 UTC
IconThis week saw the introduction of various new Apple products. Everybody has their own opinions on these new products, and websites all over the world saw enough discussions about the integrated video card of the Mini, the 'HiFi-ness' of the iPod HiFi, and more. Another issue, however, which got considerable less attention, was that of pricing. And no, I'm not talking about expensive-or-not (God, no). I'm talking about price differences between the US and Europe. And quite frankly, it's pissing me off. Note: This is this week's Sunday Eve Column.

I know that the pricing differences Apple maintains between Europe and the US has been a much-debated topic over the past few years, but I again wish to put it under the spotlight. Why? Well, because the pricing differences just hit an all-time high (or low, depending on which side of the Atlantic you live): the price of the new Intel Mac Mini has been raised by $100 in the US, but with EUR 150 in The Netherlands. To give you an idea: with today's exchange rates, $100 equals EUR 82, while EUR 150 equals $180. In other words, the price raise is roughly twice as high on my side of the Atlantic than on the new side of the Atlantic.

Now, whether or not the actual price raise is justified at all is a personal matter; some will find the new features worth it, others will not. However, I do think we can all agree that the difference in the price raise is completely unjustified, as the Intel Mac Mini Europe Edition doesn't have any better specifications than the US Edition.

All this prompted me to do some more comparisons of US prices to Europe prices. Remember that I corrected the following prices for VAT (BTW in Dutch), so all prices mentioned are without any sales tax. Prices were rounded up or down to whole euros or dollars, where applicable. Dutch prices were used.

  • MacBook Pro 1.83Ghz: $1999 - EUR 1797
  • Intel Mac Mini Core Solo: $599 - EUR 545
  • Intel iMac 17": $1299 - EUR 1159
  • OSX Tiger: $129 - EUR 104
  • iLife '06: $79 - EUR 64
  • iPod Nano 1GB: $149 - EUR 134

    Now, let's convert all that to dollars:

  • MacBook Pro 1.83Ghz: $1999 - $2166 [+8.3%]
  • Intel Mac Mini Core Solo: $599 - $657 [+9.7%]
  • Intel iMac 17": $1299 - $1397 [+7.5%]
  • OSX Tiger: $129 - $125 [-3.1%]
  • iLife '06: $79 - $77 [-2.5%]
  • iPod Nano 1GB: $149 - $161 [+8.0%]

    You see the pattern? Software is only slightly cheaper in The Netherlands (av. 2.8%), while hardware is significantly more expensive (av. 8.375%). Of course this is only a selection of Apple's product range, but I'm fairly confident when I say that if you were to compare the prices of Apple's entire product range, you'd find similar figures.

    Now, of course these figures only go for The Netherlands, and you cannot use these as an example when speaking of Europe as a whole. However, a quick check over at meine Deutsche Nachbarn shows that prices in Germany are rather similar to those of the Dutch online Apple store. It would be interesting to see how the prices of other European countries stack up.

    Of course Apple isn't the only company which employs these unjustified price differences; as such, it would be interesting to see how the pricing of other multinational computer companies differ between both sides of the Atlantic (companies such as Dell and HP). I'm again fairly confident when I say that you'll find a similar pricing pattern there.

    Now, what reasons could there be for these prices differences? To be honest, I can't find any. You could say it are local conditions; but over 8% on average is a lot for mere local conditions. Also, this reasoning doesn't explain how the 8% av. is consistent between The Netherlands and Germany (since normally speaking Germany is a 'cheaper' country when it comes to electronics, including computers and computer parts, than The Netherlands).

    I'm wondering how long companies will be able to get away with this. With the ever continuing globalization of the world market, and the ever growing significance of online (incl. international) shopping, it's gonna be interesting to see how long companies will be able to 'hide' the differences from their ever more aware customers.

    --Thom Holwerda

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