By Jo Best, 17 January 2005 16:05
NEWS Apple's "most affordable" Mac - the Mac mini - has drawn a storm of protest from European shoppers, who are petitioning Cupertino to bring EU pricing better in line with that of the US.
The online petition states: "We'd like to make an appeal to Apple on the pricing of the new Mac mini in the European Union. Basing on the last long-term rate of exchange of US dollars to euros (and vice versa) - which is 1.3293 on the spot market, so let's say 1.32 - both announced prices of the Mac mini in Europe, 489 and 589, respectively, are much too high."
The petition also states that German users come off particularly badly in the pricing scrap, with an extra 50 for the lower spec Mac mini and 60 for the higher spec machine.
The petition's writers also claim the higher EU pricing is counterproductive for Apple's business strategy and would serve to discourage potential PC to Mac switchers.
So far, the petition has attracted over 2,000 signatures from across the European Union.
One petitioner, 'Ronald', wrote "Europe is as big a market as the United States, so the prices should be similar!" Another, Walter Vermeir, added: "I like the Mac but not the price."
UK customers will also be forced to pay more than their counterparts across the Atlantic. The cheaper Mac mini sells for $499 in the US - around £268. However, to buy the same Mac in the UK would cost £339.
One UK resident, Steve Netting, who signed the petition, said: "We always get ripped off in the UK. Would be great to finally see a company treating us as equals."
It's not the first time Apple has faced the ire of customers over differences in European pricing.
In December, the Office of Fair Trading referred a complaint over the iTunes music store to the European Commission, claiming the almost 10p difference between the prices UK and EU customers pay is discriminatory.
Apple did not immediately respond to request for comment.
Comments
There are 29 comments. Join the discussion
1. anonymous
Hmm, lets say I pick up a Mac Mini on a trip to the states for $499 (£268 - but the dollar is getting stronger again) and bring it home. It's declared value (let's be honest here) is over £145 and so I must pay duty and VAT on it, say 6% duty (£16.08) and then 17.5% VAT (£49.71) then I would have paid £333.80.
A £6 difference. I don't call that unfair pricing .. I call it unfair taxing!
2. anonymous
Funny how nobody took the time to account for local sales taxes (aka VAT), and shipping charges to export to the point of sale, and pay import duty (on hardware and software).
In the USA, the $499 and $599 prices quoted DON'T INCLUDE local sales taxes and thats because almost everything purchased in the USA is priced that way. Every state has a different percentage. And some cities have higher percentages than the rest of the state, so Apple can't quote taxes until it knows the shipping address.
In the UK, prices marked on merchandise already INCLUDE 17.5% VAT, so who's ripping off who? Taking into account the local taxes brings the realisic 1-to-1 prices that should be used as a true reference point, which look much closer to equal.
3. MikeW
Same with Sony's CX355 CD changer, $199 (£106) excl state tax in US, £175 inc VAT in UK.
If you subtract VAT from the UK price, or add state tax to the US one, there's still a £40+ difference.
4. anonymous
You should read more carefully. The entire petition does take taxes into consideration. Whatever VAT you take, Apple overcharges across the board, not just on the Mac mini.
5. anonymous
Computer equipment is exempt from import duties. You will however need to pay VAT.
6. BJMC
I always believed Europeans are better educated
...but now I have my doubts.
Goods are sold in the USA on prices marked before sales taxes.
If I purchased a Mac Mini in Washinton DC, on check out I would be charged (in pounds for convenience) £268 plus 7% Sales Tax which equals £286.76.
If I purchase from an UK store, I will be charged £339 and if I deduct VAT at 17.5% this equates to £288.51.
So the price paid in the UK is a little higher than the pre-tax comparative price in the USA. This UK price includes a complex set of currency hedges including $:£, and $:various component and manufacturing currencies. Apple might well cover this hedge on the markets through a bank or might cover the risk itself.
I believe Apple now does a great job in trying to keep prices similar around the world. When Apple fixed its rates (at a cost) for 2005, we immediately saw prices on most products sold in the UK reduced accordingly.
7. Gandalf
UK price £288.51 excluding sales tax
8. anonymous
Forgetting to take the local sales tax into consideration seems to be a common problem when people compare prices. It is true that Apple has a buffer when they sets the price, but The price difference is mainly do to the VAT issue.
9. anonymous
DUH, if you don't like the price then buy something else! Apple are not a charity, they will price what they think people will pay in a particular country.
They're not know for their cheap PCs anyway and remember what you hav to add to this one.
10. anonymous
They should be free to charge what they like. If they charge too much then they will not sell many. After all, isn't that why the PC won the war in the first place?
11. Stephen Feber
well said on comparative pricing - it's about the same by the time you've figured the tax. BUT to start another one...... have you been charged 21% VAT from Apple Ireland???
12. Gerry Keen
The war was won due to killer app - Visicalc / lotus123 - plus clone ps2 component manufacturing.
13. anonymous
Gandalf your maths is wrong!
£339 Incl Sales tax
17.5% Of above = £59.32
339 - 59.325 = £279.67 NOT £288.
And if we assume that $499 @ $1.86 to the £ then US equivalent price (Pre- sales tax) of £267 is only a whole £12 difference.
I for one don't begrudge apple £12 to bring something over 3000 miles, and hedge against the relatively weak dollar getting stronger.
If anyone begrudges £12 so much - don't buy a Mac Mini then.
14. Richard
Different markets dictate different pricing. It's tough but true.
For once Apple have brought out a truly low cost machine. And for once I will defend their pricing. It is no more overpriced than any other electronic gadget in the UK.
Whilst I would love Apple to price the Mac Mini even more competitively in the UK, this is far from the pound/dollar parity that still prevails in much of the consumer market, regardless of the actual exchange rate.
This is not an Apple rip-off, it is Rip-Off Britain.
UK = rain, longer hours, lower pay & higher prices.
(But at least we have decent beer and a head of state who is only a semi-megalomaniac)
15. Allan McBain
Gandalf's calculations are correct.
VAT is added on to the base price. The £339 quoted is thus the total of base price plus 17.5%, effectively it is 117.5% of the base price.
Therefore, the base price can be found by dividing £339 by 117.5 and multiplying by 100, which gives £288.51.
16. anonymous
I can still buy a HP for less, then add AV software for less than the cost of a mouse and keyboard (takes away the virus threat).
Still cheaper to buy a good business pc.
If you think you are being ripped off, congratulations, you have just discovered why we hate apple.
17. anonymous
Anonymous - your maths is wrong. Gandalf is right. I thought it was the telecoms CEOs that couldn't do basic maths, not the telecoms engineers ...
VAT inclusive price is 117.5% of the product's VAT exclusive price
If VAT inclusive price is £339, then VAT exclusive price is
339 * 100/117.5 = 288.51
Taking your exchange rate of $1.86 the £ equivalent price of the US offering is £268.
So the difference after local taxes is £20 - or almost 1/3 of the way towards an iPod Shuffle.
I agree that it still a small amount of money. But I'm willing to bet that if the government decided to take another £20 from every £268 you earned - but only from people in Wakefield - you wouldn't be very happy...
Finally, since most Apple products are made in South East Asia, there should be approximately the same transport premium for most US users as EU users. So that argument doesn't stack up either.
Sorry - don't mean to flame you - but you should make sure you are right before telling someone else they are wrong.
18. Gandalf
Re Anonymous from Wakefield, YOUR maths is wrong.
I didn't use maths, I went to the Apple store.
Easiest way to determine net price from gross inc VAT is divide by 1.175
339/1.175=288.5106383
19. Nadir Olgacay
You think Europe is expensive check South Africa.With current exchange rates Mac mini (1.25Ghz) is Usd 763( Euro 589) and Mac mini (1.42Ghz) is Usd 906 ( Euro 696) Considering income levels of Europe and USA to South Africa this is sooo unfair.And its the same with every Apple product sold in South Africa. Dont believe it,check www.zastore.co.za .By the way VAT is 14% and import tax on computers is only 4% in South Africa.
20. Bubba the Hubba
Re: "I can still buy a HP for less, then add AV software..." ...what, and then buy productivity software, and regularly keep your Antivirus updated...? And still pay less in TCO?
I don't think so!
Quote: "If you think you are being ripped off ... you have just discovered why we hate apple."
Why hate Apple if you think they are overpriced? Hating takes too much effort. Just don't use their products and save your energy for applying patches and AV updates.
Its not clear who you mean by "we", but anybosy reading your comments might think your hatred derives from fear of losing your jobs because Macs are indisputably easier to maintain and administer. Hmmm?
21. Jim Whitehouse
Import duty does have an effect but it is based on the cost of price including carriage, not the retail price.
If you make an allowance for Apple UK's profit, then the distributor's profit, then the retailer's profit margins, this does not have a significant effect on the retail price
22. anonymous
Math is a nonsense. They should compare the buying power too. The exchange rates are volatile, while the statistically average income in Germany, in euros (around 30K/year), is very similar to that in US, in dollars.
23. Anonymous
You pay for quality. I think this is the best Mac for a while, and there are plenty of great Macs. In my line of work I use PCs and Macs, and I'd choose a Mac any day of the week. They give me no reason to complain at all, unlike the other monkeys in the office with their Dulls. Sure, Macs are more expensive than PCs, but then BMWs are more expensive than Fords. Which would you rather own?
24. Nadir Olgacay
Not only Mac Mini.Looking at the price of other
Apple products in South Africa, a Powerbook 17 inc (1.5GHZ,80GB) retails for Rand22,799 ( Usd 3800 ). Now I can buy a plane ticket to NY from Cape Town buy Powerbook for Usd2799. Do a sightseeing tour and return same day. It will be
still cheaper than buying in South Africa. Now that makes sense !
25. Ian White
I wish people moaning abouty the Mac Mini price would get real.The first Mac in 1984 cost over £2,000 THEN (about £7,000) at today's prices). It had 128k or RAM, a black and white monitor, and one floppy disk drive that barely stashed half a Megabyte of data. The Mini Mac offers 2,000 times the memory, a iLife software (equivalent to £800 if similar PC software was purchased) and 60,000 times the storage. All for barely £300 (OK call it £700 with monitor and keyboard, If everything else had improved that much in price and spec, cars would cost £200 and you could buy a mansion for £10,000.
26. Burton
It's no different then in Canada! The mini mac is way too much! I'll end up suffering with Windiws XP! Apple has to get smart! Even the iPod shuffel is over $200! I can get a nice MP3 player with display for way cheaper! Who makes their prices?!
27. Joe Rivera
Wow, people wanting government to tell companies how to price their products? Socialism is alive and well in Europe! Here's a novel idea. How about LETTING THE FREE MARKET determine what the price should be?
If you don't like the price of a product, buy a different one. I don't buy Mercedes Benzs, BMWs, Land Rovers, etc., because they're too expensive here in the USA. Should I get the EU to lower the price to that of a Chevy?
28. anonymous
If something's nice, it'll still be nice next year - and 20% cheaper. Not everyone needs to own the latest thing in order to feel good.
29. anonymous
How right you are Anonymous from Sweden.
Obviously people just don't get it...we live in a society plagued by labels. Who ever has the latest style, best gear, or recent car.
I mean COME THE HELL ON PEOPLE!
Is this what we are reduced to, labeling ourselves to have the latest products because we think we will be cool to our peers or something.
Listen, how about a reality check, and just because you have money to burn, and your are complaining about the price...here is a thought, why don't you donate some of that money to a community charity and when the price comes down to what you want, how about you go and get it.
I don't an iPod, but I think they are kinda cool. I could care less how much it costs. If I was really that shallow (no offense) and needed to impress people, I would have one already.
People need to understand that technology should not be a freaking status symbol, whereas technology should be useful.
Seriously, who in there right mind needs a freaking iPod....do you honestly need to carry a GIG worth of music. Sorry, if you have that much time on your hands, you should be doing something alittle more constructive.
Don't mean to bash anyones opinion, but it just seems nerve racking that the price is so high. Remember, different country, different economy. Apple is going to sell it for whatever they want. Funny thing is....if Apple were to sell it for like say $1000 dollars. I know people would buy it.
Scary isn't it.
Thanks for hearing me out.