Ask Apple: Why is a Macbook 30.8% more expensive in the UK than the US?
The Macbook is an excellent piece of kit; the build quality alone is leagues ahead of most laptops and given I don't game on notebooks anymore it seems logical to accept a Mac as the most stable, high quality tool for my mobile computing needs. However upon shopping around the obvious price differences between the UK and US became more than an annoyance, they became insulting.
So I decided to write the Apple PR people an email
Rather than explain everything twice I've decided to just document the email here where all my readers can see it. I don't want to be fobbed off with a generic response but get a REAL answer from one of the biggest manufacturers in the world. The email went (largely) like this:
Kind people at Apple PR,
I've recently decided I'd like to purchase a Macbook after falling in love with the product. However there is one crucial question that I would like a definitive answer to:
Can someone explain why there is such an epic difference in price between the UK and US markets? As an example let's take the entry level Macbook:
2.0GHz Intel Core 2 Duo
1GB memory
80GB hard drive
The UK site lists this as £699 whereas the US site lists it as $1,099. Some mild calculations show that the UK market is being unfairly discriminated against. The current US dollar to British pound is 2.05669. Therefore that makes the US Macbook £534.35, which is around £165 more than we pay in the UK. This equates to roughly 30.8% extra, which you have to agree is a sizable margin.
So can someone at Apple please explain to me why the UK Macbook is 30% more expensive than the identical US Macbook?
Kind regards,
Steven York.
It's worth noting that I've edited out a couple of parts explaining that I'm using this for an article on the website. I really want an answer from Apple that justifies what they're doing.
30.8% more expensive in the UK - answers on a postcard
Adobe once said that the differences in price between markets for their products are because "it's more expensive to trade in Europe" but I fail to see how Apple could justify a 30.8% price hike; especially considering their manufacturing is done in China (or at least I believe it is, the iPhone appears to be).
If/when I get a response from Apple I'll blog it here. I love the product, the branding and the image - but I don't like the notion of purchasing from a company that seems to discriminate against users without clear justification. It's in their court now; pleasing me could mean a sale and my loyalty, offering no clarity on the situation is unlikely to result in me opening my wallet.
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Showing most recent 20 of 20 comments
They don't have to justify themselves because they're Apple. If a small supplier tried this they'd struggle, but Apple have a monopoly and can do anything they like.
Bless them.
this has seriously put me off buying anything from apple uk.
They will pay a sales tax that averages 7% on top of the price. (Low of 0% in a very few places to as high as 12% in others.)
So something advertised for $500 will end up costing the purchaser $535.00
Prices in the US are NEVER listed tax inclusive.
Environmental requirements for electronics manufacturers are more stringent outside the U.S. Recent new rules have American manufacturers scrambling to adapt to the new European standards regulating use of hazardous materials. Also, eventual disposal costs are generally factored into prices in the E.U. because that responsibility is deemed to be the manufacturer’s. Such costs are passed on to the European customer in the purchase price, whereas in the U.S., waste disposal is usually paid for by property taxes - a completely different system that disconnects price from true cost.
In the U.S., citizens in most municipalities have to pay extra fees to responsibly dispose of hazardous waste such as electronics. In the U.S. version of capitalism, corporations rule our economic and political systems, and corporations have more legal rights than human beings do. We have all kinds of hidden subsidies that amount to corporate welfare; our system allows costs to be reallocated and hidden in bizarre ways. But such shenanigans don’t cross the pond.
Because the total lifetime cost of a product isn’t paid up front in the U.S., lowest-price competition drives our marketplace. Some of that total-cost responsibility gets shifted back onto the consumer, or society as a whole, so those costs can be trimmed from initial purchase prices here. Our sales tax in the U.S. is not federal, it varies by state, therefore quoted prices don’t include 3-9% sales tax. Retailers can discount manufacturers’ suggested retail price a lot, or a little, or even sell products at a loss in order to gain a customer. There are also significant differences in employment laws and other aspects of manufacturing outside the U.S. (not everything is outsourced to China - isn’t there still an Apple manufacturing facility in Ireland?).
Such legal differences between countries must be monitored, adhered to, and paid for (the lawyers don’t work for free either) and the higher cost of doing business would naturally result in higher prices outside the U.S. We can only guess what these additional costs might add up to, but I’d bet Apple’s accountants have a pretty accurate idea. I’d also bet the amount is very close to the price difference you are complaining about (after accounting for the VAT/sales tax).
Not that you should expect Apple’s P.R. department to explain this in any detail, if at all. They may not know anything about these reasons themselves, especially if they are Americans!
Once GST is removed (our blanket 12.5% govt sales tax), we commonly pay 10% more than the comparable $US price. The price difference (% wise) is less on lower-priced items, and higher on larger-ticket items.
Example, we almost have price parity for low-end ipods. Macbooks are a few hundred (NZD) dearer. Macbook Pro’s and Mac Pro’s are CONSIDERABLY dearer in NZ compared to US.
I just think it’s upsetting when major vendors reflect this because ultimately empties our bank accounts quicker. I really like the Macbook but I just can’t afford to pay UK prices for them.
I do remember Apple uk responding to pricing concerns back in the nineties when grey imports were seriously cutting into Apple Resellers sales and over a period of months, various models were actually cheaper over here - but that was in the dark days of Gil Amelio who nearly brought the company to it’s knees. I don’t think Apple worry too much whilst sales are on the up - +30% year on year in the EU.
Extra cost over the US is a sacrifice I’m resigned to for their products and have been for nearly 20 years.
The Advertised price in the USA never includes Sales Tax (like a VAT Tax) so comparing the prices the way you did is completely wrong, you need to remove the VAT Tax from the UK MacBook first. I know Euro VAT taxes are high and in the comments somebody says 17.5% on a MacBook so that makes the MacBook cost $1223.50 which is $124.50 more than the USA Macbook. That is 11.32% no where near your claimed 30%.
OK your still paying a premium, why? While you make think the USA MacBook and the UK MacBook are the same they are not. And this is where economy of scale comes in. The UK MacBook includes UK specific items I believe the Operating System is localized to British English as is the shipping box and included paperwork. I have seen comments in other places about a difference in the keyboards also but I am not sure if that effects the MacBook. So now you say how could changes in spelling cost you so much money? Well they are a different SKU number (not sure if Apple uses SKU or an other system but it is a different stock or source number) therefore are shipped as different products (look at the sales ratings on Amazon they list each of the different colored Shuffles and Nanos as different products because each has a different stock number). Now if you sell 1 million of an item and need to box it and print manuals for it and ship it to a specific country you can get a good price and then you say ok now I need 100,000 with different boxes and manuals and shipped to another country - wham the price goes ways up. thats economy of scale - the more you buy of a specific items the cheaper it is and the more you ship to a specific location the cheaper it is.
Of course the weakening dollar is also an issue, a cost factor Apple needs to build into the price.
So you see it’s not so bad after all - simply get rid of the extremely high taxes you have by replacing your socialist cradle to the grave government care mentality. And replace all your local country governments with one EU government , get one language, one currency (the only one of these option being done), one set of rules and laws, thus making the EU a market of 500 million instead of a nightmare of a legal web to business in. Now the EU is not a huge market it is a place made up of 27 different markets each with there own laws, rules, standards, language (some are the same), currency (only thing changing) and government. But on top of the nightmare of sorting out your business to work in 27 different countries then you have this quasi-government of the EU which adds another layer of laws and rules and standards on.
Face it the EU is a nightmare for business - that is the reason you pay more.
Everything’s more expensive in the UK. Maybe they need to raise prices as UK employees wages might be higher due to our pricey cost of living?
so 699 is really 594.89 with VAT of 104.11.
Rest is hidden tax for British Empire that you have to pay.
Why the hell should pound be so valuable when you guys
don\\\’t produce anything. I have zero items made in UK.