European Mac fans call Mac Mini pricing unfair

Apple Computer's "most affordable" Mac--the Mac Mini--has drawn a storm of protest from European shoppers, who are petitioning the Mac maker to bring EU pricing better in line with that of the United States.

The online petition states: "We'd like to make an appeal to Apple on the pricing of the new Mac Mini in the European Union. Basing on the last long-term rate of exchange of U.S. dollars to euros (and vice versa)--which is 1.3293 on the spot market, so let's say 1.32--both announced prices of the Mac mini in Europe, 489 euros and 589 euros, respectively, are much too high."

The petition also states that German users come off particularly badly in the pricing scrap, with an extra 50 euros for the lower spec Mac Mini and 60 euros for the higher spec machine.

The petition's writers also claim the higher EU pricing is counterproductive for Apple's business strategy and would serve to discourage potential PC to Mac switchers.

So far, the petition has attracted more than 2,000 signatures from across the European Union.

One petitioner, 'Ronald', wrote "Europe is as big a market as the United States, so the prices should be similar!" Another, Walter Vermeir, added: "I like the Mac but not the price."

U.K. customers will also be forced to pay more than their counterparts across the Atlantic. The cheaper Mac Mini sells for $499 in the United States around 268 pounds. However, to buy the same Mac in the United Kingdom would cost 339 pounds.

One U.K. resident, Steve Netting, who signed the petition, said: "We always get ripped off in the UK. Would be great to finally see a company treating us as equals."

It's not the first time Apple has faced the ire of customers over differences in European pricing.

In December, the Office of Fair Trading referred a complaint over the iTunes music store to the European Commission, claiming the almost 10 pence difference between the prices U.K. and EU customers pay is discriminatory.

Apple did not immediately respond to request for comment.

Jo Best of Silicon.com reported from London.

17.5% VAT Tends to Do That to Prices

Europeans and Brits concerned about "price gouging" ought to first consider how much of the price difference is accounted for by their exorbitant consumption taxes. Apple's ex-VAT price for Mac mini is clearly marked (although that marking may have been added recently) as £289 ex VAT. That means the Mac mini's UK price is really only £20 higher (about 7.5%) than in the U.S. -- which itself might be accounted for by the higher cost of localization for that smaller U.K. market.

In other words, shut up!

Brendan..

You're a spherical bastard. You're a bastard anyway you look at it.

Companies like Apple would do better to try and sell it at the same price. I checked Apple.ca and was not really surprised they are gouging us for an extra %20 more for the lowest configured mini. That's ludicrous! Tax or no, it does not cost %20 to sell your damn already-over-priced merchandise over the border!

Pure greed, plain and simple.

[Steven N]

Learn math before you talk

A Mac mini costs 500$ in the US, this is 385 Euros (rounded up till 5 Euro)
Adding 20,5 % of VAT (in Belgium this is the rate), gives me a price of 464 Euros, In Belgium a Mac mini costs 519 Euros. So the price difference is 55 Euros, or 72$.
Somehow I think they shouldn't try this in the US.

[sshalita]

Additional Thought

Also consider that in the US, most prices are typically quoted less any tax, which is added at point of sale, and in Europe prices are quoted including tax. To me it seems that Apple's pricing (Which I would assume to include VAT) is more than fair for European consumers.

[System Tyrant]

Well they get cheaper medicine.

We get cheaper Macs and music, they get cheaper medicine. I'm not sure who's getting jipped here.

[dejo]

Canada gets cheaper ITMS music too!

Don't forget tracks purchased through the iTunes Music Store
Canada cost only 99 cents Canadian. And that INCLUDES the
GST. Hear, hear. Who's getting jipped now?

[Thomas, David]

All Things Being Equal

If Apple, or any other company for that matter, has to sell their
product in other countries at the same price as their home
country, then they should be expected to pay the same taxes as
well.

The bottom-line, this is a non-issue, because Apple will not
being paying the same taxes, and other liabilities associated
with selling a product over seas.

Very bad journalism

As said in the first comment here, all European countries charge Value Added Tax on top of most product prices. It is like a sales taxe just a lot steeper than in the US. The varying prices across the EU exist because many countries have different rates of VAT. In the UK it is 17.5% and 19.6% in France for example. Thus explaining the different prices. to take the UK example used by the very uninformed journalist at cnet Apple "overcharges" £20 on the price excluding VAT (289 vs 269) compared to the US. Which given the recent variations of the value of the dollar against the British pound and the localisation costs is frankly quite low. The petition is completely ridiculous and very surprising since originated in Germany where VAT exists too, unless it was started by a 10 year old. This petition should be addressed to the EU countries for charging such an enormous tax on goods, not to Apple. But to see this reported by cnet is frankly appaling and very bad journalism. Please check these elementary facts before posting such ridiculous news.

[M C]

Going for the cheap site hits.

A bunch of European teenagers' whining shouldn't be the basis of a news article - even on CNet.

Is the intrepid CNet staff now scouring bulletin boards for people in Belgium who don't like Dell's return policies there? Probably not.

Why? Because Apple stories are consistently the most popular on the site, even if they're stupid.

[seaside]

re: Very bad journalism

"Please check these elementary facts before posting such ridiculous news.

I'm a Swede.
The Vat in my country is 25%.
Measured in dollars the $500 mini should then cost $625 (500*1,25) Apples price on the apple online store is $670.

The $45 difference is about 50 euro.
The article is correct.

Perhaps you should have checked these elementary facts.

Mac Mini South Africa prices

You think Europe is expensive check South Africa.With current
exchange rates Mac mini (1.25Ghz) is Usd 763( Euro 589) and
Mac mini (1.42Ghz) is Usd 906 ( Euro 696) Considering income
levels of Europe and USA to South Africa this is sooo unfair.And
its the same with every Apple product sold in South Africa. Dont
believe it,check www.zastore.co.za .By the way VAT is 14% and
import duty on computers is only 4% in South Africa.

[xylouris]

Greece not far behind

Hello everybody, such a nice place to be here, I can finally vent off a bit myself. For some prespective see below the prices in US$ for various EURO-based countries. First column is the price of the entry model Mac Mini, second column is the "high-end" model Mac Mini. Maybe seeing these prices in US$ will help our US-based friends realize what we are talking about here. I've converted the price that consumers have to pay at the Apple Store, so they include Value Added Tax (which is NOT the equivalent of the US Sales Tax, make no mistake). By the way, I live in Greece, the euro-country with the lowest per capita income (average monthly income around ?600 = US$790 currently)

Germany 645,48 777,48
Spain 645,48 777,48
Netherlands 658,68 790,68
Italy 658,67 790,69
Austria 658,67 790,69
France 658,67 790,69
Belgium 685,09 817,08
Ireland 685,09 817,08
Finland 685,08 817,81
Greece 724,28 869,14

Now, dear US brethren, tell us again that you think this Mac Mini is a smashing success at a competing price point. Not many "switchers" in Europe I'm afraid.

Of course Apple is free to ask ANY price for its products, and of course localization adss to the cost-of-sale per unit in smaller markets, but lets not forget that over here we don't have million-dollar commercials, we don't get price-difference refunds, we don't get special offers, we don't get cheap iPhoto hardcover albums, we don't have price matching policies, we dont have Apple Credit Accounts,... shall I go on? Surely all these perks add up to the cost-of-sale per unit in the US too, wouldn't you think?

"The most affordable Mac ever. Starting at ?724.28" doesn't sound that good at all of a sudden, not in Greece at least...

[farmerles]

I am a avid Apple fan - but the pricing in SA is shameful - its crazy what we are expected to pay here - they employ anti competition practices - all outlets are priced the same, you may not get a discount from a supplier. The new Mac Mini is $1199.00 US, (ZAR12000.00). A cordless mouse around $110.00 (ZAR1100.00). Nobody wants Mac here when they see the prices. Please Apple do something.

Are people ignoring taxes?

The article is silly. In Europe the prices quoted generally include
taxes. Take the UK..if you take $499 it equals £270 on the spot
market. Then add 17.5% VAT and you get £314. So the £339
base price is actually £25 higher - around the same as if you
purchased in US$ and charged the $499 to a UK credit card
because you NEVER get the spot rate from a bank.

The US and Canadian prices are almost identical to one another
when converted from US$ to CDN$. But you will pay more in
Canada because sales taxes are 15% vs usually 5-10% in the
USA.

You can't blame Apple for differences in taxes.

[sshalita]

When Tax Is Added

Also consider that in the US, most prices are typically quoted less any tax, which is added at point of sale, and in Europe prices are quoted including tax. To me it seems that Apple's pricing (Which I would assume to include VAT) is more than fair for European consumers.

Rediculous

The article says that they cost 489 euro. That is incorrect. It would be like saying that a Mac mini in New York goes for $543 and that Apple should be discounting it in New York. Now, 418 euro (the cost of a Mac mini without VAT in France) is $543 USD - a premium of $43 over the US price, but far from the $136 premium that the article slanders Apple with. Should Apple reduce the price in Europe? Maybe. Of course, part of that price might be import tax as well.

An equivalent low-end Dell costs $569 in the United States and 599 euro in Ireland. At least Apple's euro prices still come out to less than their dollar prices. Maybe you should run an article about Dell's unfair pricing tomorrow.

I think that News.com should be considering an apology for this article. There was clearly no research done and the claims are false. Shame.

[sigma8]

So if the euro goes back to the 2002 rate, would apple raise europe prices?

Stupid petition. Before even getting into the whole VAT thing, if
they want to pay less, they should deflate the value of the
euro...or just suffer and wait until the US gets somebody who
creates conditions for a stronger dollar.

Or maybe these petitioners would be happier if Apple adjusted
the prices on the mac mini daily to account for the foreign
conversion? That'd make for easy shopping...and I'm sure they'd
love it if eventually the dollar got stronger, and the prices went
up above 500/600 euro.

Yeah, I'm not sure why this made front page news. I think there's
a petition for nSync and Back Street Boys to "stop the h8". Maybe
cNet should put that on the frontpage, too.

They do rise prices if US Dollar costs more Euros

Do you think they would miss such an excuse?
It's funny it never goes backwards.

[xylouris]

US brethren, it's NOT about the taxes!

Forgive me for repeating what I already said in another post here: there are more components to a price than taxes alone. Of course you know that, it just seems to be a little bit snowed under in this "discussion". You see, in Europe we don't have multi-million-dollar commercials, we don't get price-difference refunds, we don't get special offers, we don't get cheap iPhoto hardcover albums, we don't have price matching policies, we dont have Apple Credit Accounts,... shall I go on? Surely all these perks add up to the cost-of-sale per unit in the US too, wouldn't you think?

Point of the matter is: Apple wants to compete on price with this model. I think it will do so successfully in the US. IT WON'T IN EUROPE! Not at this price point. I find it difficult to understand that Apple would come up with a strategy that is designed to purposefully FAIL!

[pmardones]

wait a second...

in Irak they didn't have democracy and look what happened to
them... there are pros and cons about living/being born in any
place in the world. Why wouldn't Apple want to offer the best
possible deal to its customers in Europe as well as in the US?
Because they hate Europeans? You all sound like Apple is ripping
Europe off to sort of compensate for the money they can't make
in the US or elsewhere. Is that what you think? That's childish.
It's all about local policies, trade rules, and the way foreign
markets work. Doing business in Europe is a pain taxes-wise, so
you better be grateful that Apple is shipping their products to
Europe in the first place. And go bash those who run the
economy over there. Case closed. Next!

[rdupuy11]

EU: 2 yr. warranty. US: 1 yr. warranty

EU laws mandate 2 year warranty on consumer goods in most countries.

In the U.S., the law doesn't mandate any such warranty, but apple gives you 1 for free, and will extend it by 2 years for $150 (to 3 years).

If it costs $75 per year to extend that warranty, then factor another $75 into the EU price...after that and VAX, its pretty obvious the EU model is less expensive than the U.S. model.

The EU people just want their cake and eat it too.

My wife is from europe, so I don't want to go slamming all europeans...even if that is a fun sport, I'll put it aside today and just say...they are not really counting for the added costs of doing business in europe, which are real and expensive.

[rdupuy11]

Ignoring VAT and Warranty differences

Even if, after calculating for VAT, you then have to further calculate for the 2yr. warranty mandated by law in most EU countries on consumer goods, vs. the 1 year warranty on the mac mini in the U.S.

Nevermind apple's website, it is 2 years in EU countries, because that is the law in those countries.

So...apple sells addition warranty extensions at $150 per 2 years.

if you calculate that at $75 per one year, the supposed price difference 'disappears'

and that is the point so many of us have been making....calculate in all the costs of doing business in europe, and you see apple isn't gouging european customers at all...

it just costs more to meet certain regulatory requirements, tax requirements, customs, and even distribution models and sales volumes are factored in, and apple comes up with their price.

No consipiracy, nothing anti-european about it.

Missed Sales Tax (VAT) of UK comparission

You compare the Mac mini UK VAT inclusive price with the US
before tax price, if you add VAT to the US price conversion to £s
you would get £314.90 - a different of just £24.10, which I
consider is reasonable as Apple are not going to alter their price
every day with the exchange rate.

Also I note Apple reduced the price on many of it's items on the
4th January 2005, which would reflect the better exchange rate
eg. PowerMac 1.8 Ghz £1099 to £999, iBook G4 12" £749 to
£699 etc.

I do agree that previously items have been overpriced, but I
think with this broad price reduction on the 4th January things
are much more fairly priced in the UK, the new iPod Shuffle is an
excellent example, UK price £69, US Price $99.  $99 converts to
approximately £55, add VAT you get £64.63, a difference of
only £4.37.

Apple does not give 2 year warranty in Europe

Except for the fact that Apple ignores the law. Spain is one of
those countries that you mention, still Apple only gives 1 year.
Way to solve this? Go to court and have a judge say who is right.
No thank you

EU: 1 YR. WARRANTY. US: 1 yr. warranty

Eu mandates whatever, still Apple only gives 1 year warranty.
Just go to whatever european online applestore, and search for
"applecare". It explicitely states it an expansion from 1 year to 3
years.

Stop spreading lies.

[dejo]

Buy more, get a discount?

http://news.com.com/Dell+expands+lead+in+still-
growing+PC+market/2100-1042_3-5540712.html?
tag=nefd.top

A quote from the article:
"Apple's market share hovers around 2 percent worldwide. In the
states, ... Apple clocks in at 3.3 percent, according to IDC."

Maybe if the rest of the world started buying more Macs, they
could start getting more "volume discounts" and the prices
would start to even out. :)

[xylouris]

About Tax (read and weep)

Geez! You US guys are a tiresome bunch, sorry to say that. You're nice people, but has any of you taken the trouble to *understand* this VAT system? I have to wonder how well based your other claims are if I hear all this rambling about higher prices due to VAT in Europe.

Let me spell it out slowly again for you: V A T i s N O T t h e s a m e a s S A L E S T A X ! ! ! Got that?

VAT is a replacement for the the Corporate Income Tax as you know it in the States. It is a subtraction method tax based on the difference between revenues and purchased goods and services for all enterprises and employers. It makes corporate income taxing simpler and more transparent. That's all. It's just plain ridiculous to use this as a justification for higher prices.

At this moment your own Congress is considering alternatives for the current tax system(s) in the US (in the framework of a supply-side tax reform) and one of the alternatives is what is called in the US: a "Business Transfer Tax" (BTT, nothing to do with transferring a business from father to son e.g.) which is based on exactly the same principles as VAT. (The other principal candidates for supply-side tax reform are: the Hall-Rabuska flat tax, the Consumed Income Tax (CIT), and the Fair Tax, a flat-rate retail-sales tax (RST) that replaces all federal taxation).

Pfeww! Get informed!

Can of worms

Mac Mini opened a can of worms. Looking at the price of other
Apple products in South Africa, a Powerbook 17 inc
(1.5GHZ,80GB) retails for Rand22,799 ( Usd 3800 ). Now I can
buy a plane ticket to NY from Cape Town buy Powerbook for
Usd2799. Do a sightseeing tour and return same day. It will be
still cheaper than buying in South Africa. Now that makes sense !

[farmerles]

Wow where do you live - who is your supplier please let me have their numbers cause I am ripped off here in Pretoria and Johannesburg - I never saw prices so good for Apple stuff here. I normally buy a ticket and do everything in the States and still have change when I come home. A 30 inch Apple Display ZAR26000.00 and US$1799.99 at 10:1 exchange rate that puts R8000.00 out of my pocket. Please let me know where you buy. [e-mail]

Alleged price fixing.

Why pick on Apple? EVERYTHING bought in the UK costs more than the EU, which in turn costs more than the US. World economies are very complex and demanding, so taking the exchange rate on a specific date and comparing prices is pointless.

Besides which the exchange rates are set based on a set of common products in the countries in question, and correct me if I'm wrong but PC/Mac don't feature in that.

It's the taxes, Stupid!

A Mac Mini without the VAT is 555,72 dollars. The price Apple
sells in the US is plus tax. Some European folks may forget that,
because in Europe, practically everything is sold with the VAT
included. That it's not a big increase. A little more than 10%. In
my country it goes between 45 and 50%. That means that a
Powerbook of 3000 USD costs 4500 here (I live in Argentina).
And we are not seeing other EU hidden taxes.