Is Apple betting against the Euro?

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I would love to know the rational behind the international pricing decisions of Apple and other companies. With the Senate investigating software pricing, I thought I would look at the pricing of the new MacBooks

MacBook Pro (15 inch, 2.3Ghz, retina display)

US $2199, UK £1799, Aus $2499.

So at today’s exchange rates and all in Australian Dollars:

US $2215, UK $2805, Aus $2499.

Hmmm. Let’s try Germany. €2279 or $2801 in Australian. Almost the same in Italy.

The interesting part is that Australia is not the highest – which is unusual. We are higher than the US price but lower than the UK and Europe. Why?

Here is one theory. Suppose Apple wants to set the same price for its new MacBook in developed countries. Also, suppose Apple wants to set the international prices but don’t want to have to change them for (say) one year. Then you may try and pick the direction of exchange rates. So is Apple betting that the Aussie Dollar will fall relative to the US dollar (say to about 88 cents US), the UK pound will fall (to about $1.22 US or $1.39 AUD) and the Euro will fall (to about 96 US cents to one Euro or 91 Euro cents to one AUD)?

If so, Apple is betting strongly against the Euro. It is currently trading at 79 Euro cents to one AUD and $1.26 US dollars to the Euro. And it is strongly betting against the British pound (currently $1.55 US or $1.56 AUD).

Of course, there may be some other logic behind the pricing …

5 Responses to "Is Apple betting against the Euro?"
  1. The Australian price includes GST; the US price excludes sales tax (shipping to Beverley Hills adds $8 recycling fee and $192 tax eg). So the comparable prices (in AUD) are US $2215 vs Aus $2271 by my count. Makes the difference against the European prices even more stark…

  2. I would assume a large multinational seller would not take bets, but buy insurance against currency movements. The only explanation can be geographical price discrimination. The markets where competition from parallel imports can be more easily prevented are Europe and Australia. And I would hazard a guess that this starts with a phoney technological explanation – say, voltages of power supply. I know that adaptors are easy to buy, but a local seller can scare consumers into thinking their US bought machine will not work with an adaptor. Or the warranty will be void. This can easily be enforced when you need to get software updates and an IP address is detected. For these products, such types of concern seem to loom large for consumers.

  3. … or it could be the economics I answer, that apple is a monopoly over its goods world wide and it sets price according to demand elasticities, etc…

  4. @JBown Sure. Except that’s not particularly interesting because their prices are pretty much the same world wide when you exclude tax.

    Of course, “monopoly over its goods” doesn’t make sense. Apple has a monopoly on making apple products? Yes, and Microsoft for Microsoft products. And Dell for Dell computers…

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