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Mini-Macs: it's a small world, after all

Taxed, maxed and out of control

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Letters Resident Register Mac-head, Tony Smith, ran an opinion piece last week, in which he suggested that Apple might not, in fact, be trying its hardest to rip off its European fan base over the Mac Mini.

Other factors than naked, rampant corporate greed could be at work, he mused, citing local sales taxes and import duties as possible contributors to the variations in prices that have upset so many European Mac fans.

And anyway - why don't we just vote with our feet and buy US kit, if it is cheaper? Well, this is trickier than it might appear, you said:

Choice? Choice? Whaddaya mean choice?

Hi just to point out a problem with the article

"No one is being forced by buy a Mac - or a PC, for that matter. We have a choice, ladies and gentlemen. And we can buy from US suppliers."

You cannot buy from US suppliers , I've tried. I spoke to nearly 10 different online stores all said they wouldn't sell a powerbook to me because if they did apple would stop their supply of apple products.

Apple US store is also only for US residents etc.

Gordy


And now many US online resellers will not accept UK and European credit cards for international transactions for "fraud prevention"

A large number of US companies who do not have a UK presence used to accept my UK based Amex and Visa cards without a problem - but now will not, or not simply do not provide options to have a UK or European billing address.

Scott


Note that the online Apple store in the US will only take credit cards whose registered address is in the US. So you can't try to buy online from Apple in the US using a UK credit card.

If you're there and walk into an Apple Store, however, then they will accept your UK card.

Jim


No one is being forced by buy a Mac - or a PC, for that matter. We have a choice, ladies and gentlemen. And we can buy from US suppliers.

Just where do you live? I assume it's the USA otherwise you'd realise just how false that statement is. Granted, it might not be completely false but it's damned near impossible to find an American company that will ship outside the US. If you have a list, it would be most appreciated.

My latest battle is to find someone who will ship me a Rio Carbon MP3 player. I don't mind a US charger as it also charges via the USB port. Amazon.com (US) has one for $208 or 160 Euros but they kindly tell me to sod off. The cheapest price I have found locally is 248 Euros (213 without tax). That's still 33% more than the US price. However because I chose to pay by Visa I would have had to fax a copy of my ID card and something like a utilities bill to confirm my address although the shipping address was the same as the registered address for the credit card. Does Pixmania ask for such things in the US? I doubt it and I'm not going to fax copies of such things so I'll end up paying an even higher price.

As you can see, your statement touched a nerve.

Kind regards, Chris Winpenny


'We have a choice, ladies and gentlemen. And we can buy from US suppliers.'

We can? Last time I checked Apple would not ship to the UK from the US. They also would not even ship to the US from the US if your credit card at an overseas address. Every purchase I have made from Apple was significantly cheaper in the US. Luckily I had to make trips there often and had friends with local credit cards so I could take advantage of the pricing.

Regards, Glen


"But be glad that the old days when the company - and, again, it was by no means the only IT firm to do this - would effectively set European pricing by simply cutting the dollar sign off the US price and pasting on a sterling symbol instead."

Those old days being the same ones where you could buy from the US with a certain degree of impunity because they weren't quite so bothered by the concept of distance selling being the deficit inflator that it is. Hurrah for globalisation. Incidentally, this like-for-like comparison is one of the reasons that the music industry got it's wrists slapped over CD pricing. It didn't actually do much good and they've found out the hard way (falling revenue and increasing sales is a paradox that confuses some) that the pricing model drives demand.

"Let's ensure that before complaining about Apple's hardware pricing policy, we understand just how much of those prices goes not into the company's coffers, how much is taken by the banks in currency exchange transactions, and how much is taken by governments."

Should we wait for the results of this search, or wait to see how proportionally the profits rise at the end of the quarter? One aspect is that the price will self-level after the rich, dumb, early adopters grab their wedge and sales fall; the profit margin will drop before the import duties and sales tax do. The only problem is that we have absolutely no clue what negotiations have taken place between Apple and the government.

James


Not very nice to suggest that the author of the petition is too stupid to include VAT in his calculations, when in fact he does this in the very first line of text after the part you quoted. What he complains about is the difference _after_ VAT. Which would be clear to everybody who actually reads the petition, but since you conveniently forgot to include a link to the petition text that won't be too many people.

"No one is being forced by buy a Mac" - I think by creating a petition instead of whining on his blog the author has made it clear that he _wants_ to buy a Mac, and he is sharing his opinion about the price with Apple. Instead of whining on a blog or filing a lawsuit.

The folks at Apple have reasons for their pricing. Probably. But it's cool to have a different view. As you subtitled your article: "Opinion". Isn't it great to have one?

Frank


Buy a calculator, dumbass

Re.apple mac pricing:

£267 + vat = £313.73, not £289, or have I too got my sums wrong?

Cheers

Steve

US prices are generally quoted without sales tax ,because it varies so much from state to state. The $499 is a before tax price. So, the sum you need to do to make a fair comparison is £339, minus the 17.5 per cent VAT. That gets you £288.50-ish.


I'm sure you have had this before but your maths might be a little suspect.

Also another way to look at these things is that you take the US price and add 17.5% and you see there is still over 30 pounds difference.

Admittedly this is not particularly huge, 10% extra.

As for import duties I think VAT is it. I looked to import a laptop from the US and checked the duties on these types of goods, they are 0 rated.

What put me off in the end was a lack of European warranty. They original manufacturer ( once I tracked them down ) would only offer 6 months from its European service centre.

A pity as the US spec was much higher than the European one and also much cheaper - ie 2200 Euros versus 2800.

I'm sure the Mac mini will cause a few debates, big negative for me is the price once properly specced, big plus is tiny form factor and hopefully quietness ( perfect for living room or home server ).

Cheers,

Andy


Americans pay tax too

You raise a good point about the European price being raised by taxes -- but it would have been even stronger if you'd noted that by far the majority of US residents simply won't be able to walk into a shop and buy the machine for $499: try offering a five-dollar bill in NY for something that's supposedly priced at $4.99.....

As shown by this table by far most places are liable for State and local sales tax -- generally around 6% for the State and a couple more for the local government's take, so say around 8% for most jurisdictions. So the "$499 MiniMac price" is a sleight of hand: as an end price, it simply won't exist in most of the States, where the machine will set you back around $540.

Harvey


I don't believe there is any import duty into the EU on computers or computer components save for LCDs. Just the VAT to pay.

David


Phew, someone finally said it!

Silly buggers moan "Apple is ripping us off!" Du-uh! V.A.T !

Hywel


Finally someone is making it clear that there are some reasons for the price difference. However, I think another reason for the discrepancy is that Apple has to include a 2 year warranty with their products in Europe. In the US they offer a 90 day warranty and then you have to buy a warranty package to cover it for the next 3 years. This would definitely cause some adjustments in price. Thank you for writing this.

Cheers, Frank


Thank you for writing your article "Euro Apple fans moan over Mac Mini pricing" on such a well-read site as The Register. I have been aware of the effect of sales tax for years and am tired of explaining it to people who whinge about the price difference. Hopefully this article will reach enough of them to reduce the frequency with which I feel obliged to explain this. At any rate it'll serve as a handy link that I can save for future use.

As far as I'm aware though, last time I looked at UK import duty on computer equipment it was zero percent. So the difference in price should be in the cost of importing from wherever they are manufactured and possibly a margin to protect Apple's revenues from exchange rate fluctuations?

Thanks again,

Andy


Excellent article on sales tax. It's amazing how few Europeans even know their local rate of sales tax, or that of any of their neighbouring countries, despite the fact that most EU countries require it to be written on every receipt.

Here in Sweden, where we have the pleasure of paying 25% VAT, the iMac mini is $543.28 at today's exchange rate ex tax, a difference of only 9%, which as you say has to cover exchange rate fluctuations, since

Apple's profits are measured in US dollars. Including tax it's a whopping $680. It's pretty simple: 25% + 9% = 36%.

Carl


Hi Tony

It's not just the sales tax or VAT making the Apple machines a tad dearer in Europe than in the States, quite a few European Countries, incl. Germany, have a royalties fee imposed on them which is around 10-20 quid. So Apple is actually quite humane on the MiniMac pricing!

Nice article, makes a change from all the moaning going on.

Ron


Corporate greed to blame?

Agree Big business bending rules for market specific margins. Corporate greed (capitalism) at its best.

So its all about Divergence rather than convergence. A contradiction to globalisation terms. I shudder to think if they started making transformers for only US markets. What will happen to Laptop buyers (travellers) ? Lug around transformers ?

Gautam


Thanks for your article about the petition I didn't sign for the reasons you mentioned, but... There's always a but...

But in your article you were missing the very important point, that the German guy that started the petition was putting as the last reason (so last but first) : All of the Apple computers (iPod maybe not) for the EU market, are build or assembled in Ireland, Apple Store in Europe is based over there (all the invoices we receive are from Cork-Ireland), so this is the real point.

Ireland is in EU, Apple pays in Euro all the transaction from and to its Irish company, already paying import duties on the parts coming from US, Taiwan, China, etc, and because in the UE there is free circulation of goods, why we should pay twice the duties?

If not, what does it mean GLOBALIZATION?

Take care,

Piero


Wish you were here?

According to this link to the Finnish Apple Store the cheaper of the Mac Minis costs Euro 425.41 without VAT. As usual, we in Finland end up paying the most for the bling-bling.

cheers

Name withheld


Hi Tony,

If the rest of Europe think its getting shafted check out the prices us Irish have to pay Eur 519.01 for the standard mac and €619.00 for the higher specced one, both these prices include tax at 21%, yet again an example of Rip-Off Ireland.

Zohar


Here in Singapore, the Mac Mini is being priced at about USD 550, which is not as much as Europe. It is still high if you consider than Singapore has an FTA with the US making import taxes about 0 and the sales tax is only about 5%. I am not sure about the sales tax in US, but Apple seems to be charging a premium anyway. Maybe it is for the 2way power supply (220v and 110v).

Also, what do Americans do when they travel to Europe or Asia, since laptops sold there are increasingly using only 110v. Isn't it a greater inconvenience for them rather than us ?

Gokul


Apple stuff is cheap in Hong Kong and they have mains power like the UK including plugs and sockets.

Cheaper of the two Minis is also £267 on the HK Apple Store, though you need an HK address for shipping. I imagine you could get a reseller to ship though £22 though it would be pushing it.

I got an iPod Photo delivered to a colleague who was staying in HK and saved a lot of money, though Apple have to shave a lot of profit from the iPod range there as everyone has cheap MP3 players.

Tom


Well, I got a good deal....

Hi, I just wanted to let you know that I recently traveled to the US and bought a dual G5 PowerMac, a 30" LCD cinema display, iSight, 40 gig iPod, and 6 gigs of third party memory. I had to pay the sales 7% tax in Georgia.

I bought 2 giant black plastic cases and a plane ticket. I bribed the check-in clerk at Hartzfield international to accept an overweight package. I argued with the ASS stupid security man, to the point of nearly being detained, over repacking it after inspection.

I talked my way through customs in the local airport. I sold the cases here for about what I paid for them. So...Total price in Euros is STILL less than if I bought it from Apple Austria.

Chris J


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