Tuesday, 13 November 2007

Dear Apple

Here is my open letter to Apple

Dear Apple,

I would love to get an explanation for why we Europeans pay 30% more for our iPods than our American cousins. I'm racking my brain to come up with some type of logical reason for why this would be so, other than Europeans make an easy rip-off target.

So here's the scoop:

-Price of an iPod in the U.S. Apple Store: $199. Price in any Continental European Apple Store: 209 Euros
-The current EUR/USD exchange rate is at 1.46, so this makes 209 EUR worth $305 - Yowza!
-"But what about sales tax?", I hear you say? True, in Europe we always pay sales tax, regardless whether it's an online or an offline purchase. So if you want a true like-for-like comparison we must remove sales tax from the European price. So take $305 and divide by the current French V.A.T. rate (19.5%). That makes the cost of an iPod $255. We're still a looong way off from the $199 price point.
-Could import duties explain this? I believe that electronic goods are excluded from any significant tariffs, but someone please correct me if I'm wrong.
-It must be shipping and transport costs! Sure, the per-mile transport costs to retail outlets, as well as postage costs, are higher in Europe (along with everything else), but distances are also shorter. So this should even out.
-Sure, the dollar has fallen against the euro, but this has been a relatively gradual process, and Apple had the chance to revise its prices... downwards.

So the conclusion I've come to is that we're being ripped off... ergo the existence of this blog and, with it, the hope that Apple will review its prices.

So I'll wait until a friend can deliver my new Nano from his trip to the States.

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