Apple Products price after exchange rate in UK (& Europe)

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Level 1

8 points

Apple Products price after exchange rate in UK (& Europe)

Hi Apple Community,

Living in the the UK and enjoying Apple products, I still dont understand why we pay the equivilant numerical price for products in USD.

The iPhone 11 Pro Max (64GB) in America costs $1099, which in GBP is equvilant to £841.21, yet we have to pay £1099. That means we pay £258 more, for what? Where does this money go?

That means that the most expensive iPhone model (11 Pro Max 258 GB) at this moment costs us the equivilant of $2,000! (vs American $1,499). Apple will pocket that $500 difference.

Would it just be cheaper to wholesale purchase Apple products from the USA to the UK and sell at retail price? I mean, £200 profit for each iPhone model sold is pretty insane profit margins, considring packing, deliverying and customs fees would not go up to that high of a profit cut.

This also applies to European (and most other) countries, where Apple pockets exchange rate differences. I am not clear at all on why Apple chooses to do this, does anyone know?

Edit: Spelling

Posted on Jan 12, 2020 8:58 AM

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Answer 1

Top-ranking reply

Lawrence Finch

Community+ 2025

Level 10

228,348 points

Jan 24, 2020 7:52 AM in response to Yachte

First, your sales tax figures are wrong. The highest sales tax in the US is 11%.

But what you are missing is the UK prices include a 19% VAT. Apple doesn’t get any of the VAT; that goes to Boris.

Oh, and the VAT in the rest of the EU is also around 19%.

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Answer 2

Jan 12, 2020 9:06 AM in response to Yachte

US prices do not include taxes.

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Answer 3

Jan 24, 2020 8:29 AM in response to Yachte

It's also important to remember that pricing is not just based on the currency exchange rate. The cost of doing business varies from one country to the another as well.

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Answer 4

y_p_w

Level 6

17,762 points

Jan 12, 2020 9:56 AM in response to Yachte

There are gray marketers out there, but that runs into the issue of warranty coverage.

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Answer 5

Yachte Author

Level 1

8 points

Jan 24, 2020 7:26 AM in response to Johnathan Burger

The way I worded my question kind of meant I didn’t consider sales tax. That’s not the case.

The highest possible tax for sales in the US is 9%, that still means there is a large chunk of value equivalent profit made from a sales made in the UK compared to Apple products in the US.

9% of $1,500 is *definitely* not close to $500. Fine, $380. That is still a huge amount of cash that Apple banks for zero reason. Right?

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Answer 6

Jan 12, 2020 9:37 AM in response to Yachte

The US pricing doesn't include the Sales Tax / VAT.

It depends on the state, but for example if you buy an iPhone 11 Pro Max 64 GB in California it's 1099$ + 9,5% Sales Tax which you have to add to the 1099$.

Also there are import fees and various other costs in place.

And Apple cannot just sell US iPhones in the EU, because there are different models with different modems. The US uses different LTE bands and cellular technologies as the EU. Those EU modems can also be more expensive to make / built into EU iPhones.

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Answer 7

Yachte Author

Level 1

8 points

Jan 24, 2020 7:26 AM in response to Community User

The way I worded my question kind of meant I didn’t consider sales tax. That’s not the case.

The highest possible tax for sales in the US is 9%, that still means there is a large chunk of value equivalent profit made from a sales made in the UK compared to Apple products in the US.

9% of $1,500 is *definitely* not close to $500. Fine, $380. That is still a huge amount of cash that Apple banks for zero reason. Right?

Reply