Why is Apple's pricing so outrageous in Europe? New 27 inch + 43% vs. US

The new 27 inch display retails for EUR 1,099 in Europe and USD 999 in the States. Given an exchange rate of 1.30 USD/EUR that is a healthy markup of over 43% on US retail prices. Thus it cannot be due to the VAT difference to many EU countries. It seems to be simple and brutal price discrimination.

Are European customers really willing to pay more for Apple equipment? Or is Apple intentionally aiming for a lower market share here? It puzzles and frankly annoys me.

Posted on Sep 17, 2010 9:36 AM

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5 replies

Sep 23, 2010 1:38 AM in response to mviehweg

I agree that the UK and Europe pricing is outrageous, I am shocked and disappointed as I was hoping to get one to go with my MBP 15" but this is now not a sensible option. I guess though it remains to be seen how many they sell at this price level.
As a new 27" imac starts at £1399 the maths seems to be:
Display costs £899 + Magic Mouse £56 + Wireless Keyboard £56 = £1011
£1399 minus £1011 = £388. So does this mean that the rest of the computer in an iMac is only worth £388...!
I think that Apple are charging a huge premium for a stand alone display compared to it's component price as part of an all in one iMac, so maybe they are not seeing it as a big seller, just for those who absolutely have to keep to the Apple brand on their desk.
Not that I am criticising the display itself, it is gorgeous and I would love to have one sitting on my desk... just too expensive in the UK for me.

Oct 24, 2010 7:55 PM in response to 12frets56

It's just as outrageous in other parts of the world too.
The US dollar has been quite close to the Australian dollar for a while now, and yet apple still charges us a lot more, the 16GB wi fi iPad is $499 in the US and $659 in Australia.
The Australian dollar is only two cents less than the American.
The same discrepancy can be seen with all of the apple products.

Oct 27, 2010 6:44 AM in response to gnagy

What people forget is that the Euro was originally launched at parity with the USD (1:1) and as a currency has similar pricing power. The problem is over time the Euro has strengthened some and in the last 8 years the USD was intentionally weakened against world currencies. Pricing parity has to cover currency hedging and other finance/treasury functions as can be demonstrated this year alone. Remember just 6 months ago the Euro began to tank on concern of Greek and Spain. At that point the USD to Euro rate was on par to what it was 5 years ago. The 3 month span where USD was trading at a low of $1.20 per Euro which cut into corporate profits big time - compared to today's rate that alone is a 15-16pts margin difference. 15pt improvement since April but it could just as easily swing back. Then on top of 15pts consider VAT - anywhere from 20-25% which must be priced on top of their target GP% which must cover additional costs of doing business in EU.

The question is, would a weaker Euro make you happier so that it would seem Apple isn't gouging you as badly? Make it more expensive to travel Aand make your Euro buying power less - likely response to that would be higher EU pricing on hw.

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Why is Apple's pricing so outrageous in Europe? New 27 inch + 43% vs. US

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