Steve Jobs on international iPad pricing: educate yourself and blame your government
Steve Jobs has purportedly twice again responded to customers, this over concerns about international iPad pricing and why its typically higher than in the US. To the UK customers, Jobs replied:
Please educate yourself. UK prices must by law include VAT, which is around 18%. US prices do not include tax.
MacRumors did the math and figured out:
The standard VAT rate in the UK is 17.5%, meaning that the £429 base price for the 16 GB Wi-Fi iPad in the UK is actually only £365 in "pre-tax" pricing. At current exchange rates, this corresponds to approximately $540 in the United States, or an approximately $40 premium for U.K. customers. While the price difference is not insignificant, it is considerably smaller than it might appear at first glance.
For Germany, Jobs replied:
Blame your government. Germany just added a new copyright levy for computers.
Which is something TiPb linked to yesterday -- Germany has introduced 15 EUR surcharge to computers for "copyright". Sigh.
As to why iPads and other consumer electronics cost more outside the US in general, companies typically attribute this to higher transport costs, union fees, and general business expenses.
But do Steve Jobs' classically terse emails make those price differentials any easier to swallow?
Editor-in-Chief of iMore, Executive Producer at Mobile Nations, co-host of Iterate and ZEN and TECH, cook, grappler, photon wrangler.
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In Germany it's a copyright tax for devices with burners in them... They applied the tax to the iPad anyway !? Guess they'll apply this tax to any "computer" device now. Does this tax then give the right to copy ?
What abt for CAD?!
rene, i think you put the wrong title.. It should be iPad isn't it??
@Felix: thanks, fixed.
People are basically stupid, But hey thats the internet. I worked out for my own blog that for the midrange 32gb wifi iPad the difference in prices in the UK is even less, its in single figures.
But of course its easier to scream foul and then make a fool of oneself emailing Jobs.
"But do Steve Jobs’ classically terse emails make those price differentials any easier to swallow?" Yes. I like Steve's terse replies. It must so annoying to receive all these dumb questions all the time.
me too, I laugh every time. how did we ever make it 6 months witout the curt response?
"“But do Steve Jobs’ classically terse emails make those price differentials any easier to swallow?” Yes. I like Steve’s terse replies. It must so annoying to receive all these dumb questions all the time."
it makes the price alot easier for me to swallow. I don't think they're dumb questions tho, I had no idea there wasn't VAT in the US, so at least I know the reason for the differences now, and that it's not just a way to get more money.
Err.. I don't buy that it costs more to get an ipad to Toronto than it does to new York. Sorry, I DO NOT buy that. Completely ridiculous how Apple keeps screwing us over with pricing, iPhones cost $100 more each in Canada (unsubsidized). Tell me that's not ridiculous.
I'd like to "educate" Steve about his crap products like the ipad with their pathetic inability to retain a wireless signal AND crap iPhone that drops calls because the radio can't handle the transition between edge and 3G.
I'd also like to educate him about the fact any other major hardware or software vendor in the world that made you SCHEDULE and appointment for tech support would be laughed out of business. He ought to kiss the ground his lame fan boi's walk on.
I would like to educate Rjd, you don't have to buy Apple products since they suck in your book. But you must be a little jealous of Apple products, you seem so mad.
I'm not complaining, the Australian pricing is quite good.
Jt - with our current exchange rate, it only equals out to about $25 bucks more for us Canadians, which is a lot better than I was expecting. Considering how much more we pay for books and magazines from the states.
If The difference in price is explainable as tax, why not have the Apple stores list the base price and the Tax separately, as is often done here in the States?
I can't believe Uncle Steve is endearing himself to Euro Governments with this "Blame your Government" remarks. The diplomatic thing would have been to explain the price difference and avoid the snarky remark.
Odd that a man who donates big bucks to the Tax and Spend Party in the US should be throw barbs at similar governments in Europe.
Rjd... Apple's tech support is second to none. I make an appointment and I get my iphone Replaced right on the spot if defective while under warranty. You know what happened when my girlfriend try to make a claim through the sprint store about her defective blackberry? The reps there made her file a claim and waited almost a week for a new phone to come in the mail because they couldn't give out replacements in her sprint store!
And you're actually complaining because we have to make an appointment at the genius bar!?
Dear Steve Jobs
Thanks for your generous advice which I took serious. So I did the math for Switzerland. Here my findings:
I took the official iPad pricing for Switzerland and the USA from the Apples official country websites. Furthermore I collected all government induced taxes/charges/fees.
Here the math: Swiss pricing reduced by taxes and converted to USD through the actual exchange rates (1.1027 CHF/USD). Below are the PREMIUM to be paid in Switzerland:
16GB WiFi + 47.98 USD 32GB WiFi + 57.55 USD 64GB WiFi + 58.69 USD 16GB 3G + 44.41 USD 32GB 3G + 53.97 USD 64GB 3G + 55.11 USD
Dear Steve Jobs
a) As you can see above, I educated myself by studying all relevant information.
b) With 7.6% Taxes and NO additional fees, I could not really blame the government.
While I have followed your advice, I could not find anybody to blame outside from Apple.
This is a service provided for free by a Swiss Citizen.
Sorry for the data all in line, but the blog software just cut away my nice table.
(The manual table I had to make, because I could not upload my comparison chart in PDF.)
Greetings from Switzerland, Rolf
Just preordered mine here in Germany, and the strange 15 euros tax was not present. The price was 599Euro for the 32 GB version.
Why does it not surprise me that it was Steve who hadn't correctly educated HIMSELF!? LOL turns out he was completely wrong about the taxes.
@Gino: 1st Sprint is not a hardware or software provider. 2nd there is no tangible difference between waiting a week for a "genius" appt and a week for Sprint to get it together. 3rd Apple knows about these hardware problems and does nothing to fix them. Because that might mean they'd have to admit to them. What good does it do to get another 3gs when they ALL have the same crap hardware???
Yeah Jobs is stupid. He knows nothing about business. He knows nothing about making a profit. Let's see, Jobs lives in a multi-million dollar house. You? In your parent's basement or low-rent apt.
Jobs +1 You 0
Here's the real maths for the UK:
£429 base price, without VAT is £365.10. The £/$ rate is around 1.45 today, so that equates to a VAT inclusive price of $622 and a $ price of $529. However, there's no way to avoid VAT, it is obligatory.
US pricing is $499 for the 16GB model. Therefore, excluding tax, the UK price is fractionally higher than the US price. Sales tax of between 8-10% needs to be added, depending on state. Take say, CA as an example, where tax would be approx $48.65 and an obligatory $8.00 recycling tax, taking the total cost to $555.65, making it more expensive in the UK by $67.
The ex_VAT price is slightly higher because Apple deal in and report in $, so add margin into the cost to deal with currency fluctuations. The inclusive-VAT price isn't dictated by Apple; that's a country by country thing and no different to the sales tax in different US states.
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