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Apple massively increased the price of the the entire iPad line-up in Europe. It's going to be interesting to see what impact it will have on Apple's earnings.

Apple massively increased the price of the the entire iPad line-up in Europe. It's going to be interesting to see what impact it will have on Apple's earnings. Will Apple's goodwill make people accept the new prices or will Apple's brand take a hit for increasing the price in times where people are financially vulnerable?

simonh 4y ago
Given that keeping prices the same would weigh down their earnings as well, since they're reported in dollars, the financial impact of this is not a simple thing to calculate.
- haunter 4y ago
  Oh wow company makes $1,7b profit instead of $1,9b. The end is near. Capitalism is really a cancer when the only thing matters is growth growth and growth. The Facebook movie was really spot on with the "A million dollars isn't cool. You know what's cool? A billion" line
  - hemantv 4y ago
    Hate capitalism as much as you want. But it's the only system that consistently uplift people and improve standard of living over time. It's the best system among all the bad systems out there.
    - wahnfrieden 4y ago
      sounds like hardened political rhetoric to me and classical capitalist realism - no place for that here
      - dijonman2 4y ago
        How does your comment differ from your own judgement?
        wahnfrieden 4y ago
        where am I repeating a hardened propaganda line? all I did was identify one
      - simonh 4y ago
        If you can find evidence of a different system that’s come anywhere close to raising living standards of ordinary citizens nearly as much, I’d love to hear about it. And no, China doesn’t have a communist economy, pretty much everything productive about China is capitalist.
        wahnfrieden 4y ago
        wengrow & graeber's recent research shows plenty of evidence (post discovery of agriculture and well beyond dunbar's number), that's a good place to start with your question. tangentially, mark fisher is also good for unpacking what you've said
        simonh 4y ago
        Thanks for pointing me to wengrow & graeber. I've not read the book, but went through the summary on wikipedia which seems pretty good. It's interesting and I don't have any problem with the claims or conclusions in the summary, butI don't really see how it critiques capitalism. It talks about the fact that progress isn't linear and that societies don't inevitably become more hierarchical, and I agree that seems right. In fact I could argue that capitalism is precisely an example of societies becoming more decentralised as Europe moved away from feudal and state monopoly systems, and individual financial, association, labour and property rights became established. At the same time monarchic and imperial systems gave way to democratic forms of government, with a few autocratic bumps along the road. So to me liberal democratic capitalism is much more similar to the egalitarian societies encountered by European imperialists than it is to those imperial systems of the time. The only difference is that technological advances in transport, communication and the management of complexity have massively scaled up economic activity and the benefits that flow from it. But then from what I can Tell Mark Fisher denied that there is such a thing as an economy. I'm not sure I rally get what he meant. anyway thanks for the references.
        wahnfrieden 4y ago
        their book dawn of everything connects the dots to capitalist realism and graeber's earlier books cover related territory. they would disagree with some of your conclusions. it's a great read and the complete opposite of fukuyama's end of history argument mark fisher doesn't deny economy, he takes a materialist perspective on it. his book 'capitalist realism' is probably a good starting point (i've only read his other works, that one is supposed to be a concise read of his thesis) cheers for taking the time to broaden your perspective
    - Bakary 4y ago
      Whenever there is this sort of discussion, I can't help but wonder what each person is actually referring to. We typically aren't discussing purely capitalist or socialist economies, but highly specific systems with their own mixture of regulations and rules over nations with their own specific cultures and material realities.
  - cyberlurker 4y ago
    They have a responsibility to their shareholders. I think raising prices amid inflation is the responsible thing to do… these are not essential goods like food and fuel.
  - bitL 4y ago
    People still don't understand exponential function / compound interest...
  - pb7 4y ago
    You could opt for consumer electronics from European companies instead.
- tshaddox 4y ago
  It's certainly not simple for me to calculate, but I would guess that Apple has people with more information and more experience calculating such things. It's not usually a company often associated with being bad at making money.
astorsnk 4y ago
It's not like they did it out of spite or greed - both the EUR and GBP have plummeted against the USD over the last year. One area they could look at though is outrageous storage premiums. The price jump between levels is now a joke.
- e3bc54b2 4y ago
  > The price jump between levels is now a joke. It has always been a joke. Now it just ain't funny anymore.
- bitL 4y ago
  300 to 600EUR increase for the most basic iPad is not reflecting 25% EUR collapse.
  - soneil 4y ago
    The european price is actually better than it was last time around, which is surprising. Using Irish numbers (because I'm Irish ..) At announcement (Sept 2021), the 9th gen was $329 US, which was €280 (at the time). Plus +23% VAT gives us €345.22. The actual retail price was €399 - 15.5% higher? At announcement, the 10th gen is $449 US, which is €459. Plus +23% VAT gives us $564.75. The actual retail price is €599 - 6.5% higher. The hike is the increase in the base price, plus the exchange rate, plus the accompanying tax. We're actually closer to parity on this release than the last release. (Also - you must admit rounding 399 to 300 is rather disingenuous.)
    - diebeforei485 4y ago
      Apple still sells the 9th gen iPad. How much does it cost today in Ireland?
      - soneil 4y ago
        €450. It's still $329 in the US, which is €336 here, or €413 after tax. So it's 9% higher than parity - better than it was (at release), but not as close as the 10th gen is. What I tend to see in apple's european pricing is three (well, 2.5) things. One is that they're ridiculously hooked on round numbers. 413 is never going to be 413 on the sticker. And two, is that it's very rare that they change the sticker price after it's released. (Sounds silly when they've just bumped the 9th gen & ipad mini, but I'm genuinely struggling to think of any prior examples). So the .5 is that this means their prices include what's essentially a gamble on the currency. It doesn't just reflect where the rate is now, it reflects where they think it's going. This time last week, we were paying less dollars for the 9th gen than the US was - and they've taken the unusual step of actually correcting for that. In short, the house always wins. I just don't buy the theory that the increase is a punishment for the EU's decision on usb cables etc. The EU and US prices are aligned within roughly the same margin they're usually aligned by. It seems people don't realise how quickly a 20-something% shift in currency and a 20-something% tax rate add up (on top of the increase on the US price), and they'd rather grasp at theories than calculators.
mritun 4y ago
That’s interesting! It could partly be explained by falling Euro but could also be Apple increasing prices to include the “fine” taxes. Cost of doing business invariably gets passed on to customers.
collegeburner 4y ago
well Apple's an American company and we have one of the few relatively strong currencies in the world. so anything we export is going to get very expensive for y'all very quick. don't be so fast to blame Apple. Apple's cost of business in europe is also going up from fines and requirements to e.g. migrate charging. so it's not surprising that is passed through to european customers. also there are plenty of good substitutes and Apple has always been more of a premium brand so i don't think the "financial vulnerability" argument holds water here.
samatman 4y ago
Apple doesn't need Europe. The region it's included in is worth 19% of Apple's business, and that region includes the Middle East, India, and Africa. Europe might be 10% of the business, maybe a bit more, maybe less. Worth keeping in mind. They're quite able to wind down business in Europe if the alternative is being forced to build their devices in a way they don't want. Raising prices to match the extra cost of doing business in Europe is a no-brainer. If that means it's no longer profitable to sell to the subcontinent, no problem, they'll just... stop doing that.
- smoldesu 4y ago
  It's cute to imagine a world where that happens, but there isn't a chance Apple abandons their multi-billion dollar European investments because everyone hates the lightning connector. The premise of Apple leaving Europe is an idle threat.
- not_math 4y ago
  Even if it's just 10%, you don't abandon 10% of your market. That's 8 billions for Apple just last quarter.
- sangnoir 4y ago
  > They're quite able to wind down business in Europe if the alternative is being forced to build their devices in a way they don't want This assumes Apple's management has the stomach for the resulting negative revenue growth and the subsequent reaction from Wall Street. Also, a huge chunk of their cash offshoring / tax minimization strategy is based in Europe: they'd revert to USB-A charging ports if the choice was between that and shutting down the Irish office.
  - samatman 4y ago
    Why would they pull out of Ireland? They could have one store in Dublin, that sells the last model iPhone which was grandfathered in, while supplies last, for a couple grand, or whatever the price ends up being once Europe is done objecting.
- 4y ago
Bud 4y ago

simonh 4y ago

Given that keeping prices the same would weigh down their earnings as well, since they're reported in dollars, the financial impact of this is not a simple thing to calculate.

haunter 4y ago
Oh wow company makes $1,7b profit instead of $1,9b. The end is near. Capitalism is really a cancer when the only thing matters is growth growth and growth. The Facebook movie was really spot on with the "A million dollars isn't cool. You know what's cool? A billion" line
- hemantv 4y ago
  Hate capitalism as much as you want. But it's the only system that consistently uplift people and improve standard of living over time. It's the best system among all the bad systems out there.
  - wahnfrieden 4y ago
    sounds like hardened political rhetoric to me and classical capitalist realism - no place for that here
    - dijonman2 4y ago
      How does your comment differ from your own judgement?
      - wahnfrieden 4y ago
        where am I repeating a hardened propaganda line? all I did was identify one
    - simonh 4y ago
      If you can find evidence of a different system that’s come anywhere close to raising living standards of ordinary citizens nearly as much, I’d love to hear about it. And no, China doesn’t have a communist economy, pretty much everything productive about China is capitalist.
      - wahnfrieden 4y ago
        wengrow & graeber's recent research shows plenty of evidence (post discovery of agriculture and well beyond dunbar's number), that's a good place to start with your question. tangentially, mark fisher is also good for unpacking what you've said
        simonh 4y ago
        Thanks for pointing me to wengrow & graeber. I've not read the book, but went through the summary on wikipedia which seems pretty good. It's interesting and I don't have any problem with the claims or conclusions in the summary, butI don't really see how it critiques capitalism. It talks about the fact that progress isn't linear and that societies don't inevitably become more hierarchical, and I agree that seems right. In fact I could argue that capitalism is precisely an example of societies becoming more decentralised as Europe moved away from feudal and state monopoly systems, and individual financial, association, labour and property rights became established. At the same time monarchic and imperial systems gave way to democratic forms of government, with a few autocratic bumps along the road. So to me liberal democratic capitalism is much more similar to the egalitarian societies encountered by European imperialists than it is to those imperial systems of the time. The only difference is that technological advances in transport, communication and the management of complexity have massively scaled up economic activity and the benefits that flow from it. But then from what I can Tell Mark Fisher denied that there is such a thing as an economy. I'm not sure I rally get what he meant. anyway thanks for the references.
        wahnfrieden 4y ago
        their book dawn of everything connects the dots to capitalist realism and graeber's earlier books cover related territory. they would disagree with some of your conclusions. it's a great read and the complete opposite of fukuyama's end of history argument mark fisher doesn't deny economy, he takes a materialist perspective on it. his book 'capitalist realism' is probably a good starting point (i've only read his other works, that one is supposed to be a concise read of his thesis) cheers for taking the time to broaden your perspective
  - Bakary 4y ago
    Whenever there is this sort of discussion, I can't help but wonder what each person is actually referring to. We typically aren't discussing purely capitalist or socialist economies, but highly specific systems with their own mixture of regulations and rules over nations with their own specific cultures and material realities.
- cyberlurker 4y ago
  They have a responsibility to their shareholders. I think raising prices amid inflation is the responsible thing to do… these are not essential goods like food and fuel.
- bitL 4y ago
  People still don't understand exponential function / compound interest...
- pb7 4y ago
  You could opt for consumer electronics from European companies instead.
tshaddox 4y ago
It's certainly not simple for me to calculate, but I would guess that Apple has people with more information and more experience calculating such things. It's not usually a company often associated with being bad at making money.

astorsnk 4y ago

It's not like they did it out of spite or greed - both the EUR and GBP have plummeted against the USD over the last year. One area they could look at though is outrageous storage premiums. The price jump between levels is now a joke.

e3bc54b2 4y ago
> The price jump between levels is now a joke. It has always been a joke. Now it just ain't funny anymore.
bitL 4y ago
300 to 600EUR increase for the most basic iPad is not reflecting 25% EUR collapse.
- soneil 4y ago
  The european price is actually better than it was last time around, which is surprising. Using Irish numbers (because I'm Irish ..) At announcement (Sept 2021), the 9th gen was $329 US, which was €280 (at the time). Plus +23% VAT gives us €345.22. The actual retail price was €399 - 15.5% higher? At announcement, the 10th gen is $449 US, which is €459. Plus +23% VAT gives us $564.75. The actual retail price is €599 - 6.5% higher. The hike is the increase in the base price, plus the exchange rate, plus the accompanying tax. We're actually closer to parity on this release than the last release. (Also - you must admit rounding 399 to 300 is rather disingenuous.)
  - diebeforei485 4y ago
    Apple still sells the 9th gen iPad. How much does it cost today in Ireland?
    - soneil 4y ago
      €450. It's still $329 in the US, which is €336 here, or €413 after tax. So it's 9% higher than parity - better than it was (at release), but not as close as the 10th gen is. What I tend to see in apple's european pricing is three (well, 2.5) things. One is that they're ridiculously hooked on round numbers. 413 is never going to be 413 on the sticker. And two, is that it's very rare that they change the sticker price after it's released. (Sounds silly when they've just bumped the 9th gen & ipad mini, but I'm genuinely struggling to think of any prior examples). So the .5 is that this means their prices include what's essentially a gamble on the currency. It doesn't just reflect where the rate is now, it reflects where they think it's going. This time last week, we were paying less dollars for the 9th gen than the US was - and they've taken the unusual step of actually correcting for that. In short, the house always wins. I just don't buy the theory that the increase is a punishment for the EU's decision on usb cables etc. The EU and US prices are aligned within roughly the same margin they're usually aligned by. It seems people don't realise how quickly a 20-something% shift in currency and a 20-something% tax rate add up (on top of the increase on the US price), and they'd rather grasp at theories than calculators.

mritun 4y ago

That’s interesting! It could partly be explained by falling Euro but could also be Apple increasing prices to include the “fine” taxes. Cost of doing business invariably gets passed on to customers.

collegeburner 4y ago

well Apple's an American company and we have one of the few relatively strong currencies in the world. so anything we export is going to get very expensive for y'all very quick. don't be so fast to blame Apple. Apple's cost of business in europe is also going up from fines and requirements to e.g. migrate charging. so it's not surprising that is passed through to european customers. also there are plenty of good substitutes and Apple has always been more of a premium brand so i don't think the "financial vulnerability" argument holds water here.

samatman 4y ago

Apple doesn't need Europe. The region it's included in is worth 19% of Apple's business, and that region includes the Middle East, India, and Africa. Europe might be 10% of the business, maybe a bit more, maybe less. Worth keeping in mind. They're quite able to wind down business in Europe if the alternative is being forced to build their devices in a way they don't want. Raising prices to match the extra cost of doing business in Europe is a no-brainer. If that means it's no longer profitable to sell to the subcontinent, no problem, they'll just... stop doing that.

smoldesu 4y ago
It's cute to imagine a world where that happens, but there isn't a chance Apple abandons their multi-billion dollar European investments because everyone hates the lightning connector. The premise of Apple leaving Europe is an idle threat.
not_math 4y ago
Even if it's just 10%, you don't abandon 10% of your market. That's 8 billions for Apple just last quarter.
sangnoir 4y ago
> They're quite able to wind down business in Europe if the alternative is being forced to build their devices in a way they don't want This assumes Apple's management has the stomach for the resulting negative revenue growth and the subsequent reaction from Wall Street. Also, a huge chunk of their cash offshoring / tax minimization strategy is based in Europe: they'd revert to USB-A charging ports if the choice was between that and shutting down the Irish office.
- samatman 4y ago
  Why would they pull out of Ireland? They could have one store in Dublin, that sells the last model iPhone which was grandfathered in, while supplies last, for a couple grand, or whatever the price ends up being once Europe is done objecting.
4y ago

Bud 4y ago