Bleed The Continentals Dry (1/18/05)

Oh, no-- Europeans are up in arms because Apple priced the Mac mini too high! At least, that's what CNET reports, as it tells of an online petition protesting Apple's decision to charge €489 for the entry-level mini, which, at today's exchange rate, comes to roughly $639.19-- a whopping $140.19 more than the US price, or 28 percent higher. And sure, we'd be the first to agree that a pricing discrepancy that out of control would warrant even such drastic action as asking a bunch of random 'net surfers to type in their names and click a button. (What, no guillotine? 28 percent, people!)

Here's the thing, though: CNET never mentions that Apple's European pricing includes the horror of VAT, the per-country sales taxes in Europe that are annually responsible for thirty to forty vacationing New Hampshire residents dropping stone cold dead on the spot when they encounter taxes of at least 15 percent on practically everything they see. In Germany, for instance, the €489 price tag on the entry-level Mac mini clearly states that the price is actually €421.55 before the 16 percent tax; that's roughly $551.02-- still about 10 percent higher than the $499 we pay here in the States, but a darn sight less brain-seizing than the $639.19 it looks like Apple's charging, from which it has to cut the State in for its piece of the action. And in France it's even worse; the price for a Mac mini there is €499 after tax, but €417.22 ($545.36) before it. That's a 9.3 percent before-tax price premium for French customers-- and a 19.6 percent tax markup, which, frankly, makes us want to go fetal in the corner and sob uncontrollably.

But while CNET seems to have neglected the issue of VAT, the authors of the petition did not; they simply feel that Apple charging Europeans 10ish percent more for the same Mac mini as they charge Americans is unfair. And ultimately, sure, it probably is-- though that's not necessarily Apple's fault. We're not claiming to know Apple's reasons for pricing things the way it does, but while the petition's authors note that Apple's "profit margin is the same, independent from the sales location" and "transport costs are equally the same for delivery to customers in the US and the EU," they never address the possibility that maybe, just maybe, Apple's cost of doing business in foreign countries is higher. Maybe we're being naïve about this, but spending two weeks in London sucked cash from our wallets so fast the suction made our buttocks cave in. So if it costs more to live there than here, isn't it possible that it costs more to run a business there, too? And that Apple might want to factor that added cost into its product pricing in countries where it spends more money to generate each sale? Just a thought.

In fact, a quick-and-dirty, completely unscientific test of that theory may lend it some weight. We pulled up Dell's web sites for the US and the UK (just so we wouldn't have language issues, monolingual ignoramuses we are) and compared low-end desktop prices between here and there. The cheapest system we found offered for sale on both sites was the Dimension 3000, and after configuring both systems as closely as possible and subtracting out the included UK VAT of 17.5 percent, we found that the UK price was still nearly 15 percent higher than the US price. Time for another petition? (Okay, we admit it: variables like Dell's promo pricing on different options in each market make this test pretty much worthless. Beats workin', though.)

In any case, there's some indication that Apple did tone down its European markup specifically for the mini; a quick spin through the French Apple Store reveals that the price premiums on entry-level eMacs, PowerBooks, and iPods are 12 percent, 11.3 percent, and a whopping 19.7 percent respectively. Suddenly a 9.3 percent markup on the Mac mini doesn't look quite so bad. Don't get us wrong, here-- we'd love to see Apple lower its pricing in Europe, because there's a huge market of benighted Wintel users over there just waiting to be converted into slavering, cash-dropping Mac fans. But from what we can see, the Mac mini's pricing in Europe is at least in line with the prices of other Apple hardware, if not better. Whether that's good enough remains to be seen; apparently there are at least 6,000 people out there who say it's not. So let's just sit back and wait for the sales figures, shall we?

SceneLink (5143)
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The above scene was taken from the 1/18/05 episode:

January 18, 2005: Dell's CEO calls the iPod a "fad"-- like the Sony Walkman. (!) Meanwhile, Apple reveals some details about the return of the Pepsi iTunes Music Promotion, and some Europeans are a little miffed at Apple for overcharging them for the Mac mini...

Other scenes from that episode:

  • 5141: A "Fad"-- Like Breathing (1/18/05)   Wow, it's like clockwork: evidently every 7.28 years, the CEO of Dell Computer has to come out and say something two parts mean and three parts stupid about Apple to the press. Back in late '97, the CEO was company founder Mike Dell, who, when asked what he'd do if he were in charge of Apple, replied that he'd "shut it down and give the money back to the shareholders"...

  • 5142: Yellow Cap Fever, Take 2 (1/18/05)   We sure hope your kidneys weren't planning to slack off this year, because they're about to get the workout of their entire renal career: faithful viewer neopod tipped us off to the fact that Apple has officially posted a teaser page for the return of the Pepsi iTunes Music Promotion, which, according to the posted rules, officially kicks off at the end of this month...

Or view the entire episode as originally broadcast...

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