Linked by Thom Holwerda on Sun 5th Mar 2006 21:32 UTC
Apple This 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.
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RE[4]: Warranty
by Thom_Holwerda on Sun 5th Mar 2006 23:15 UTC in reply to "RE[3]: Warranty"
Thom_Holwerda
Member since:
2005-06-29

* Localization (For Belgium, this means an Azerty keyboard, both dutch, french and german localizations of the manuals and further tiny stuff).

Dutch Macs ship with the same keyboards as US ones. True Dutch keyboards are very rare, actually (I have one, a very old IBM keyboard that came with a real ps/2).

* The overall higher cost of labour in Europe. Since someone needs to deliver it to your doorstep.

As I already said, all prices are excluding shipping costs.

* And then come all kinds of European regulations that require some minor modifications. (The one that pops in my mind is the limit of dB that the iPod may produce in Europe is quite a bit lower than in the US).

That does not matter either; you might as well say: the US requires a higher dB limit, so they must be more expensive in the US. Get my point?

Reply Parent Score: 5

RE[5]: Warranty
by ormandj on Mon 6th Mar 2006 06:49 in reply to "RE[4]: Warranty"
ormandj Member since:
2005-10-09

Just to preface this, I used to work for Apple, but these are my opinions based on observations outside of my employment. Common sense, actually. ;)

"Dutch Macs ship with the same keyboards as US ones. True Dutch keyboards are very rare, actually (I have one, a very old IBM keyboard that came with a real ps/2)."

Well, that's nice. There are other countries in Europe, you know. ;)

"As I already said, all prices are excluding shipping costs. "

That's wonderful, but that doesn't change anything. Labor in Europe costs more money. Just because delivery to you isn't included in the price, it doesn't mean all delivery/shipment/warehousing costs aren't. Those add up to a substancial amount, and *you* are going to pay for those additional costs. Apple isn't just going to eat the cost because you write a rant.

"That does not matter either; you might as well say: the US requires a higher dB limit, so they must be more expensive in the US. Get my point?"

Your point is off the mark, I am afraid. USA = Apple's primary market. That's where their cash comes from. So, the products are designed for the US market, the US people, the US laws and regulations.

ANY deviation from this, costs money. Economies of scale make mass production less expensive, the more standardized your products are. Any and every change made costs additional $$$. It may not seem like much to you, but in manufacturering two products with slight differences can cost a fair amount more than simply popping out one model.

Using your (OPs) example about the iPod. In the US there isn't a limit on the output of iPods (well, if there is, it's pretty high.) People want their iPods to be as loud as possible for various reasons. Therefore, Apple makes iPods which can output at Xdb. Now, here comes the EU to the rescue! In order to sell iPods in the EU, they've got to limit the output of the iPods there. That requires a deviation from the norm/standard product. You can argue all you want about "it's a simple software change!" or "it's a simple hardware change!", but those *simple* changes add up to $$$ in production that have to be offset somehow.

Oh, and concerning the prior discussion concerning warranty. If it's legally required by your local government for products up for sale in your country (not just products manufactured in your country) then Apple *will* obey they laws. They can't afford not to. You better bet those costs are also factored in.

There are various other costs involved, additional laws and regulations they have to submit products for certification and so forth. So not only is Apple having to get FCC approval and so forth, they then have to also get approval from the respective country's organizations. Again, more and more $$$ out the window. Once more, *you* are going to pay for those things. If you don't like it, start your own company to compete with Apple, but offer products of the same quality at better prices in your country.

Quite frankly, if Apple wants to charge 8x more in country X Y or Z, and people are willing to pay it, I'm all for it. It's no different than me paying 10x more for a cell phone than people in Japan, and having it be crippled beyong belief. I won't even get into the markup we pay for European clothing/apparel/etc. Having a GF from Europe, I know all too well the CRAZY amounts of money I have to spend here to get European brand X good, when if I could travel to that country, I could pick it up for pennies on the dollar. Italy is my favorite offender. ;)

You don't see me writing rants about it. They don't have a whole lot of valid reason for it either, Apple does. Shh and either pay up or deal with the rules of a world-wide economy and companies out to make a buck!

Reply Parent Score: 3

RE[6]: Warranty
by Umbra on Mon 6th Mar 2006 07:26 in reply to "RE[5]: Warranty"
Umbra Member since:
2006-03-06

Quote Your point is off the mark, I am afraid. USA = Apple's primary market. That's where their cash comes from. So, the products are designed for the US market, the US people, the US laws and regulations. /Quote


Well:

Mac sales outside the United States (pct of total sales)

2005 4th quarter: 40%
2004 4th quarter: 39%
2003 4th quarter: 38%


I bet my hat that at least over 50% of Apples total profit arrives from non-us sales. US may be the biggest market at the present, but certainly not the most profitable one. And it will become the smallest source of revenue, in a foreseeable future

Market strategy:
US = high-volume & low profit strategy
World = low volume & high profit strategy (for each country)

Reply Parent Score: 1