Apple's Exchange Rate

[j.m.]

Hey guys,

So the exchange rate according to Google is 1 US Dollar equals .6602 British Pounds.

An Apple iPod Touch costs $199 in the US and £159 in the UK. Seem reasonable? Not really. You pay more for an iPod in the UK than in the US.

The Real exchange rate=(Nominal exchange rate*domestic price)/Foreign price

In my case this is (.6602*199)/159=.8643. So if you buy an iPod from the apple store in Britain you are essentially over paying by $67 or £44.65.

Apple's making a killing on every iPod sold in the UK...

Jon

[jim76]

have you only just realised that? Apple products have been over priced for years. That's the price you pay for style over substance!

[Bungleaio]

AFAIK prices on the US site don't include tax where as the prices on the UK one does so the difference isn't as big as it 1st appears.

Apple is making more money that they have ever done before, every new product they launch creates massive interest and sells out instantly. I can't see them lowering their prices ay time soon.

[MatJohnson]

Yep sales tax is not shown. Although, apple stuff is overpriced for what it is. Apparently, each iPhone 4 costs $99 to make.

[Big G]

people who want apple stuff pay for apple stuff. I personally love everything the company does. I'll be buying an iphone 4 in a few months.

my nan's house cost £1000 to build and she sold it for £160000. What an item costs to make is neither here nor there. business is business.

p.s typed on a 2010 macbook pro

[SlowOne]

Originally Posted by Big G

p.s typed on a 2010 macbook pro

Jealous...

(Typed on my 6 year-old Powerbook G4!! )

[SlowOne]

The US price excludes sales tax (VAT). Sales tax is local, and IME varies from 3% to 8%. Only very few states (eg New Jersey) levy that tax on ANY purchase, including those from out of state.

The US price at your rate of exchange when adjusted for 7% import duty (best number I can find for electrical goods, open to a challenge on that rate!!) and then VAT on top of that (yes, another tax on a tax that we enjoy over here!!) puts the total price at £165, compared to the UK price you quote of £159, which will include both Duty and VAT.

It is nothing like a simplistic as that, but it follows two immutable Laws of business:

Profit = Sales Price - Cost. If you can charge more, you make more profit. Apple can charge more, so they do. The American market will stand $199, the UK market will stand £159 and they can sell every one that they make. If it were your business would you sell your product or service for less than you could get? Neither would I...

Brand is worth more profit than functionality. Why are Ford, GM, Chrysler, Toyota, Honda, Renault, Nissan... in fact every car manufacturer except VW Group, BMW and Mercedes struggling to make money? Because VW, BMW and Merc can charge premiums of 20% to 30% over the others for the privilege of having their badge on the bonnet of what is (as people like to describe Apple) an inferior product.

Welcome to the real world, where people like to make money. If you don't want them to, don't be a fashion victim!! For balance, I have an iPhone, Mac and iPod, but drive a Volvo because it is based on the Ford Focus/C Max (the most reliable car in Germany and the UK!) and cost £500 less than the same spec of Ford Focus!! I'm happy to be a victim of Apple 'fashion' and functionality, but not BMW blandness and austerity!!