Apple prices in Europe are under fire (again)

MacWorld UK and CNet are both reporting that European Mac fans are upset by the price of the Mac mini on this side of the Atlantic. MacWorld does a better job than CNet in noting that the UK price does include a 17.5% VAT while the $499 US price does not, so contrary of what CNet pretends, the UK price equivalent would not be £268 but £313, i.e. £26 less than the actual price tag of £339. In the Euroland, the price is 499€ VAT included, which in France with its 19.6% VAT translates into 417€ without VAT, which is $545 at today's rate of $1.3065 for 1€. So, for me, the Mac mini is overpriced by Apple by about 9.2%.

Compared to the previous study of Apple European prices I did one year ago, the cushion that Apple adds to protect itself against the currency exchange risks is significantly lower for the hardware than it used to be. However, it's worth noticing that the markup is now higher for software, moving up from 6% to 9%. Looking at the quite wide currency exchange variations, I think those guys are fighting a lost battle. Apple is unlikely to get below 9% to cover for this risk, especially with a product which margin, I reckon, must be ridiculous.

Keep in mind an important cultural difference in price tags between the US and Europe. In the US, where taxes are set by states, price tags never include taxes. In Europe, where VAT is actually a tax mandated by the EU, price tags of all products that are offered to individuals must include VAT -- i.e. advertising a price without VAT to individual consumers is illegal in Europe, while it is the norm in the US. Comparing price tags without adjusting for VAT is stupid, companies are not responsible for the local taxes imposed by states and countries.

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