Other Why are UK prices the same as US prices?

[shenfrey]

iPhone for example will cost in the US $1050 and in the UK that same iPhone will cost £1050.

Obviously exchange rate taken into consideration UK are paying more, but if it was that simple people would be kicking up a storm. So since no one ever complains about it, I assume it somehow works it’s self out??

Can anyone explain? Thanks!

 

[Furzul]

iPhone for example will cost in the US $1050 and in the UK that same iPhone will cost £1050.

Obviously exchange rate taken into consideration UK are paying more, but if it was that simple people would be kicking up a storm. So since no one ever complains about it, I assume it somehow works it’s self out??

Can anyone explain? Thanks!

VAT. American prices are plus sales tax.

 

[KrisLord]

Using an iPhone XR as a comparison...

$749 becomes £701 when you convert and add VAT so there’s a £48 difference vs U.K. £749.

Annoying, but represents the different costs of running a business and opportunity to charge more if things still sell.

Note that not all items have a £1:$1 comparison, if I recall there’s a slight difference ok iPad pricing.

 

[ftaok]

iPhone for example will cost in the US $1050 and in the UK that same iPhone will cost £1050.

Obviously exchange rate taken into consideration UK are paying more, but if it was that simple people would be kicking up a storm. So since no one ever complains about it, I assume it somehow works it’s self out??

Can anyone explain? Thanks!

Lots of reasons for the price differential. Including, but not limited to ...

• Higher import tariffs
• Higher wages
• Longer and more comprehensive warranties
• Because they can

 

[Furzul]

Using an iPhone XR as a comparison...

$749 becomes £701 when you convert and add VAT so there’s a £48 difference vs U.K. £749.

Annoying, but represents the different costs of running a business and opportunity to charge more if things still sell.

Note that not all items have a £1:$1 comparison, if I recall there’s a slight difference ok iPad pricing.

Also, I think that Apple set this margin to allow for fluctuations in the pound/dollar price, so that if the pound increases in value they don’t lose dollars.

 

[AppleHaterLover]

Included VAT plays the most obvious role here, but remember that Apple has zero mercy regarding exchange rate fluctuation.

It used to be that the GBP prices, while not far off from US prices, were nominally lower in GBP - this was pre-Brexit.

Post-Brexit, the GBP went downhill and Apple jacked up their prices almost immediately (they’ve also done this in Turkey, Russia, Brazil, the list goes on and on). The GBP has recovered, but Apple is not known for actually reducing prices when these exchange rate fluctuation situations end.

So yeah, it’s more expensive. But then Apple wants to make money...

 

[tarsins]

UK prices include tax (VAT), US prices don't. Considering this and the EU consumer protection that the UK currently enjoys (most Americans will buy AppleCare as well) there's not a big difference after all.

 

[Mercenary]

Youve also got import duty. Cost of operations and that items sold never track the whole pound vs dollar. Also... because they can.

If you buy it in Hong Kong (where it will come with a UK standard power plug) it would be way cheaper. But thats if you flew out there and bought it home. If you buy it and try and import it then they would catch it and charge you VAT, import and more.

 

[KrisLord]

To add what I think is actually most relevant....


Cost of manufacture isn’t particularly relevant when setting any sales price.

There’s no reason for a product to cost the same in 2 totally different market places. Very few companies simply add a profit markup into their cost to get a sales price.

The regional selling company (Apple Ireland?) will set the selling price in each market, with the aim of maximising revenue.

In the UK where iPhone has a higher penetration than say France, they can perhaps set a higher price knowing that existing iPhone customers need to upgrade and are unlikely to switch to Android.

 

[BODYBUILDERPAUL]

Included VAT plays the most obvious role here, but remember that Apple has zero mercy regarding exchange rate fluctuation.

It used to be that the GBP prices, while not far off from US prices, were nominally lower in GBP - this was pre-Brexit.

Post-Brexit, the GBP went downhill and Apple jacked up their prices almost immediately (they’ve also done this in Turkey, Russia, Brazil, the list goes on and on). The GBP has recovered, but Apple is not known for actually reducing prices when these exchange rate fluctuation situations end.

So yeah, it’s more expensive. But then Apple wants to make money...

Absolutely! Remember the 20% post Brexit price increase in the autumn of 2016. Happened overnight and was truly shocking! I remember it well as I was buying a MacBook. I was waiting for a £100 price reduction as many felt that it was overpriced and then suddenly BANG - the MacBook increased by 20% from £1299 to £1550. I had to double check as I thought that it was a price mistake. Let's just say that I keep my Apple products forever now. I can't afford to replace them :'(
[doublepost=1543258111][/doublepost]I'm not buying these excuses - if you look at other US companies outside of tech, their prices aren't identical for the UK and US. TOM FORD is an example. Very upmarket fashion brand. One of his products is 97 dollars whereas in the UK, it is selling for £65.

In reality, I'm under the impression that Apple simply pushes it's prices to the max because they know that people will pay for them. It's just that now, people are keeping their products for a longer amount of time which in reality will cripple Apple's earnings. iPhone X at 999 upwards was the testing product. Will people pay it? Yes, there's a market. I guess that in 5 years time from now, there will be a £1950 iPhone. Just don't lose or break that phone!

 

[lyceumHQ]

My cousin travels a lot with work so always buys her iPhones in the US and it works out a good but cheaper.

I got the 8 and paid full £699 UK price. She got the 8 in the US and even with tax hers came in under £600.

Apple is about making money. And will gouge their customers as much as they possibly can. They charge £45 for a plastic case ffs. This isn’t a company looking to give anyone value for money.

But then all companies are exactly the same and at least with Apple I get the benefit of decent customer service and a store to take my iDevice to for repair or replacement should I need to.

Having had the misfortune of dealing with Samsung’s customer indifference I’m happy to pay apples premium.

 

[The-Real-Deal82]

VAT. American prices are plus sales tax.

Any idea what the current tax is in the US? VAT here is still 20% and I’ve always thought it’s still way cheaper buying in the US. We do get cheaper contracts here though and don’t have to pay restocking fees or connection fees etc so there are some bonuses of being in Europe.

 

[JPack]

Any idea what the current tax is in the US? VAT here is still 20% and I’ve always thought it’s still way cheaper buying in the US. We do get cheaper contracts here though and don’t have to pay restocking fees or connection fees etc so there are some bonuses of being in Europe.

The rate varies all over the U.S., but a typical consumer in California or New York pays around 9% tax.

It's the UK government who's greedy, not Apple. Apple prices in the UK are quite reasonable. The UK government charges unreasonable VAT rates.

iPhone XR 64GB
Total £749.00
Includes VAT of £124.83​

That 20% VAT is ridiculous. Without the VAT, the XR is £624.17 (US$799).

 

[Azathoth123]

Any idea what the current tax is in the US? VAT here is still 20% and I’ve always thought it’s still way cheaper buying in the US. We do get cheaper contracts here though and don’t have to pay restocking fees or connection fees etc so there are some bonuses of being in Europe.

Buying from Apple, the state plus county/city sales taxes amount to about 9.75%, and it’s roughly the same in neighboring states. Amazon seems more like 2-3%, but I’m not sure on what and how they compute tax.

 

[The-Real-Deal82]

The rate varies all over the U.S., but a typical consumer in California or New York pays around 9% tax.

It's the UK government who's greedy, not Apple. Apple prices in the UK are quite reasonable. The UK government charges unreasonable VAT rates.

iPhone XR 64GB
Total £749.00
Includes VAT of £124.83​

That 20% VAT is ridiculous. Without the VAT, the XR is £624.17 (US$799).

We used to pay 17.5% but the 2008 banking crisis put an end to that when consumer spending fell through the floor. It was put up to 20% and never seemed to go back down.

You say Apple are not the greedy ones but compared to other similar consumer electronics, their prices are fixed for nearly a year after release whereas other brands do reduce their prices. That’s obviously Apples prerogative. Our tax is way too high though I agree and our government are greedy too.

I think things are changing this year though as iPhone deals are popping up cheaper than ever before. You can get an iPhone XR on Vodafone currently with unlimited mins, texts and 100GB of data with no upfront cost for £36p/m. That’s very cheap really for what you get and right now carriers are begging you to buy phones because so few people are upgrading. I think we are nearly at a point where Apple will have no choice but to offer cheaper devices going forward. The £1k iPhone is never going to be the mainstream norm and the XR is priced more competitively but came at a time where many have little reason to get a new phone.

 

[apolloa]

iPhone for example will cost in the US $1050 and in the UK that same iPhone will cost £1050.

Obviously exchange rate taken into consideration UK are paying more, but if it was that simple people would be kicking up a storm. So since no one ever complains about it, I assume it somehow works it’s self out??

Can anyone explain? Thanks!

Simple profit $$$$$$$$$$$, we have usually paid more in the UK then the US for goods. Apple just lurves those profits though.
They aren’t the only ones who do this either.