Possible EU pricing

[scottjl]

actually it is.. Manan who wrote the email complains that the list prices for the iPad are $150 more in Europe than the list prices in the US. What he fails to take into account (which Steve points out) is the list prices in Europe include the VAT where the list prices in the US do not.

it is difficult to post a list price for an item in the US when you are selling nation wide because there is no federal sales tax and each state has a different state tax amount. for example new york state has a 4% state tax on luxury goods and no sales tax on food items. deleware has no sales tax at all. pennsylvania has a 6% sales tax on luxury items. illinois has a 6.25% sales tax on luxury items and a 1% sales tax on food items (not that i'd recommend eating your iPad).

so what would apple do? post an ad stating:

$499 in delaware
$519 in new york
$529 in pennsylvania
$531 in illinois
...and so on and so on..?

that would just be silly. besides americans aren't used to prices being listed like that, and quite often some people drive across the state border to purchase high-ticket items to avoid sales taxes (though that technically is illegal if they don't claim the item and pay the appropriate tax when they return to their home state). the drive from philadelphia to christiana mall in delaware is less than a hour. is it worth it to save $30? probably not because you'll spend that in gas, but it might be to save $100 or more on that new 17" macbook you want to buy.

so jobs points out to the uneducated emailer that he isn't really comparing after-tax prices which is what he should be. then he wouldn't find the mark-up quite so much. (he also doesn't account for the higher shipping costs to europe.)

[AnemicOak]

Originally Posted by scottjl

it is difficult to post a list price for an item in the US when you are selling nation wide because there is no federal sales tax and each state has a different state tax amount.

Not to mention county and city sales tax in some locations. For instance here in Minnesota we have 6.875% sales tax everywhere in the state. Where I live specifically there are additional taxes of 0.25% and 0.15%. If I go to some neighboring cities there are also city sales taxes in some locations (generally an additional 0.5%). So depending on where in the state you're buying tax is 6.875% to about 7.875%. (there are also additions for lodging, food & beverage and Alcohol some places in the state).


There are apparently 11,000 different sales tax jurisdictions in the US.
http://taxlawyernyc.net/how-many-sal...-in-the-us.htm

[Sischa]

Originally Posted by scottjl

actually it is.. Manan who wrote the email complains that the list prices for the iPad are $150 more in Europe than the list prices in the US. What he fails to take into account (which Steve points out) is the list prices in Europe include the VAT where the list prices in the US do not.

it is difficult to post a list price for an item in the US when you are selling nation wide because there is no federal sales tax and each state has a different state tax amount. for example new york state has a 4% state tax on luxury goods and no sales tax on food items. deleware has no sales tax at all. pennsylvania has a 6% sales tax on luxury items. illinois has a 6.25% sales tax on luxury items and a 1% sales tax on food items (not that i'd recommend eating your iPad).

so what would apple do? post an ad stating:

$499 in delaware
$519 in new york
$529 in pennsylvania
$531 in illinois
...and so on and so on..?

that would just be silly. besides americans aren't used to prices being listed like that, and quite often some people drive across the state border to purchase high-ticket items to avoid sales taxes (though that technically is illegal if they don't claim the item and pay the appropriate tax when they return to their home state). the drive from philadelphia to christiana mall in delaware is less than a hour. is it worth it to save $30? probably not because you'll spend that in gas, but it might be to save $100 or more on that new 17" macbook you want to buy.

so jobs points out to the uneducated emailer that he isn't really comparing after-tax prices which is what he should be. then he wouldn't find the mark-up quite so much. (he also doesn't account for the higher shipping costs to europe.)

For the uneducated under us Steve Jobs was talking about not comparing net prices with gross prices which is correct. So net price for a 64gb model is 465 £ in the US. The net price in UK will be 509 £.

I really care nothing about apple pricing model but to compare US gross prices + VAT with europe gross prices is just BS. It also has nothing to do with shipping or is really someone under us that uneducated that He believes all the iPad came from California dreamland Campus? Then turn around your iPad and read the small assembled in china quote

Its profit, thats it and its legit.

[scottjl]

i didn't say it was all shipping did i? but there is going to be some difference in shipping costs from china to the us and china to the eu. and there might be some additional overhead, i don't know. but it isn't as large of a difference as the emailer thought it was. seriously, do you think apple has any particular reason to charge 44 more in the uk? i guess maybe if he hates the uk that much. oh well. travel to the us and buy one instead.

[Sischa]

Its not about hate its about profit i would say. With the sucess of us Sales and ppl paying moon prices all around i think its just natural to charge more.

[scottjl]

nahh.. i can't agree with that. why risk pissing people off for a measly $100? is all the bad-will worth an extra $100 to a company like apple? i doubt it.

[murraypaul]

Originally Posted by scottjl

seriously, do you think apple has any particular reason to charge 44 more in the uk? i guess maybe if he hates the uk that much. oh well. travel to the us and buy one instead.

The reason is that they think people will still buy them at that price.
Pricing is ultimately based on what people will pay, more than what things actually cost to make/distribute/sell. Electronics are generally more expensive here than the US, so Apple don't stand out as doing anything particularly egregious.
Plus it gives nice round numbers of £499/£599/£699 for the top-end models. Emotionally the price difference between say £499 and £519 seems greater than between £479 and £499. So in Europe the prices are euro 599/699/799.

[HarryT]

It is more expensive to run a business in Europe than in the US. Business taxes are generally higher, so it's not unreasonable to charge a little more. The additional cost for the iPad in Europe is pretty modest.