Apple drops Mac mini prices internationally - Page 2

Amen, I would snap up a Mini at $499. Maybe Apple can do a $499 Mini in the future with a AMD Bobcat and good ATI integrated graphics.

No, Katastroff is correct. It's an adjustment for FOREX rates. When the Mac Mini was released back in June, the USD was at 5 year high versus the EUR. The Euro had fallen from $1.50 in Jan to $1.18 in June. Therefore, Apple priced the Mac mini according to the prevailing exchange rate. However, USD strength has been short-lived as the EUR has climbed back above $1.40. Thus, Apple was able to cut prices to reflect the weaker dollar.

So let's compare them.

AMD 2.3GHz vs. Clarkdale 3.06 GHz
23" 1920x1080 vs. 21.5" 1920x1080
7 Home Premium vs. Snow Leopard
6GB RAM max vs. 16 GB RAM max
HD 4270 vs. HD 4670
802.11g vs. 802.11n

Who makes the LCD panel in the Dell? The iMac is IPS quality.

Love the mac mini, I bought one for my wife, but why in the heck would you put a card reader on the BACK of a mac mini? Makes absolutely no sense whatsoever, they should have just left that off !!!

Not sure about how makes the LCD, its LED backlite but not IPS. However here are some things you didnt mention. I assume your looking at the $1200 entry level Imac. I'll compare it to the $799 2305.

-AMD 2.3GHz vs. Clarkdale 3.06 GHz

AMD is a Athlon II X4 Quad-Core, the I3 Clarksdale is a great processor but its a dual-core

- Screen no problem there
- OS No problem here
- Memory, both systems are configured with 4gb, dell's limit is 8gb not 6gb (that is a config limit of that SKU), and so is the 21.5" Imac since it only has two slots, the 27" has 4 slots

- Video, No Problem here
- Networking, All dell 2305's in the store have N Networking

Also the $799 model has a 750gb HD vs's 500gb.

Plus, HDMI connectivity a 7-in-1 card reader a 6 USB ports.


Im not trying to prove that it is superior to the entry level Imac, which it may or might not be. My argument is that its comparible and it costs $400 dollars less.

Thats true, it be nice if someone would integrate into a keyboard, since I always tuck the computer into an awkward place

Sorry to bother but one more thing, IPS is a technology not a grade, just as TFT is a LCD technology. Would you say there is a wide array of different TFT panels out there with varying levels of quality? I would. Would it also not be fair to say that IPS panels also vary in quality?

Price on the apple site this morning (3rd Nov 2010) was A$899 (US$897.55) for the Mini and A$1299 (US$1297.06) for the Server, and that includes a 10% sales tax.

He is not correct. Prices for retail goods simply are not set according to exchange rates. In fact, if you want to look a bit deeper into this, you will notice that the GBP is still relatively weak against the USD. Yet, Apple dropped the price of the mini in the UK as well. This is hard to explain by exchange rate logic alone, because currency exchange rates have very little to do with setting retail prices.

So...?

So its a spot check on pricing comparison using today's exchange rate.

Exchange rates have everything to do with setting prices. Apple, as well as all other public companies, target a desired profit margin which is setting selling price relative to product costs.

The GBP had dropped from above $1.65 to below $1.45 in June, and now has risen back above $1.60. The key here is at the time of the Mac mini launch, the Euro currencies had just crashed due to their sovereign debt crisis. However, confidence was restored and markets quickly recovered.

I keep track of Apple's international pricing in USD terms, and the Mac mini before the price cut was nearly 30% higher than US pricing. Nearly all other Apple products are only slightly more than 10% higher. That's generally the case for most all products / in all countries. Thus, the Mac mini was priced way above Apple's typical US price band so it cut the price to bring it back in line. When Mac mini was released, at then prevailing FOREX rates, it was slightly 10% higher versus US pricing. That's consistent with the typical variance Apple shoots for.

I'm not seeing the point. Today the prices in Australia might be lower than if they were converted to US dollars. Another time, they might be higher. Either way, they the cost to Australians hasn't changed. This is the key take-away point that seems to be so widely misunderstood.


The profit margin they target is the highest one they can manage. They don't reach a target and then give up anything beyond that out of charity. Apple and every other company will always attempt to maximize profits. Always. Always. Always. Cheap currencies give exporters like Apple a great opportunity to increase profits. Ask the Chinese -- that's why they keep their currency undervalued.

You simply cannot compare prices by country by computing exchange rates. It makes no sense, since the products are not priced for foreign markets, they are priced for the markets in which they sell. They will only raise or lower them for competitive purposes, since any other reason is dumb.

No, I totally agree with you. I think we are both just looking at it two different ways. Companies always maximize profits which is a function of profit margin (price - cost) and unit volume. Volume is sensitive to price, and the degree of that sensitivity is the demand elasticity. What I was trying to say, was USD strength was eroding profit margins, therefore Apple raised its prices to protect those margins. Higher prices can lead to lower sales, but not always lower profit since margin is higher. Companies will try to hike prices to the point where decreased volume doesn't reverse the margin effect of higher selling price.

Competition is a major factor in demand elasticity. Obviously Apple saw that cutting prices would increase unit volume much more than the effects of lower profit margin/unit leading to higher overall profits.

I guess what I was trying to point out was that Apple had raised prices on nearly all its products this year, to offset the USD strength. It only did that because Apple products can command premium prices. It just so happened that the Mac mini launch occurred at the time the USD was at its high.

I totally agree that prices are set according to the markets in which they are sold based on competitive landscape. However, exchange rates can be either a competitive advantage or disadvantage and in this instance, it was the fluctuation in rates that allowed Apple to price more competitively.

No question, a weaker currency provides companies located in that country with a competitive advantage. They can afford to lower prices and maintain their margins -- if they so choose. Or they can increase their margins if they're already positioned where they want to be, vis-a-vis the competition. I see Apple doing a whole lot more of the latter. Enviable margins are one of the keys to their success. They surrender them very reluctantly.

Seems like i got to this thread late. David, you have used the Apple TV as your example. There are no arguments about that one, Apple is blatently overcharging - as your figures show. But you are being selective in your choice. Here they have priced the Apple TV the same price in pounds as in dollars so that $1=£1. Why they should that in this product when it is poorer value in the UK anyway, due to less content being available is a mystery.

However, Apples more usual pricing ratio is 1$ = £0.85. e.g. MacBook Air 11" $999 v £849.

Still on the steep side, even after considering VAT etc, but not half as bad as your figures make them look for 90% of Apple products.

The prices of components drop as new and better parts arive and nobody wants that old crap
Same goes for apple. Im always astonished about that the price wouldnt change to cheaper if they didnt upgrade at all. Why would anybody then bother to buy outdated hardware for a premium price.

Its what is going to happen if they dont dump the core 2 line on the mini soon... I wouldnt buy it until they upgrade to core i series hardware AND im not buying if they increase the price by 100Euros again after that.

well sled dogs -are- more expensive to use for shipping.

Why am I being quoted with others' posts????

The simplest way I can observe it is as such. In many countries, the general policy seems to be that Apple sets the price of products in that country based on the US Dollar. That doesn't mean it is a direct conversion of the US Dollar to the country's currency, there is always a premium of some sort, whether due to taxes or what not.

Apple can never sell it lower than the equivalent price in the US. Since Apple's finances are in USD therefore any payments they get back from other countries must be at least what they would get for it in the US, otherwise technically they're selling products at a reduced margin outside the US. You would be very hard pressed to find any country whereby it is cheaper to buy Apple products there than the US, removing state and govt taxes from the calculation.

The fly in the ointment is currency fluctuation. Apple generally does not reprice products in-between model refreshes outside the US, or even in the US. Therefore, if the non-US country currency weakens, it means Apple is getting less money back than it should from that country.

I think the primary tool of calculating price outside the US is a conversion based on the US price, then a premium applied to cover various things but definitely to cover the "spread" for currency fluctuations.

Of course this "premium" will have to take into account how successful sales are in that country and the cost of business in that country, taxes etc.

As I mentioned Apple does not have a practice of repricing products mid-product-cycle. They tend to adjust for currency changes whenever new models are announced or refreshes of existing models, etc.

Therefore you will end up with situations whereby some models eg. MacBook Pros are quite expensive in a country even though that countries currency has gone up, while in the same country MacBook Airs may be more in line with the exchange rate because they were recently refreshed/repriced (besides that the price was dropped in the US).

Has anyone found trends in Europe, Australia, etc. that correlate with my observations? My experience in the pricing is mostly South East Asia but I have seen such trends in Australia previously.

I don't see how the existence of a "premium" can be assumed for Apple products outside of the US market, unless it can be shown that no such "premium" exists in the US market. This argument apparently assumes that Apple prices products outside of the US further above the market for competitive goods than they do in the US. Since this seems like an irrational pricing policy (not to mention, one doomed to fail), I question the argument that Apple deliberately prices its products higher than the competitive market everywhere but in the US. I think all of this talk of currency exchange rates clouds the fundamental issue, which is that companies have to price their products competitively within every market in which they hope to succeed.

I understand your point, but if pricing was competitive in every country Apple operates in, there must be cases where it is *cheaper* in USD equivalent to buy from that country. However, I don't think there are any cases of this, unless you can name some.

In many Latin American and Asian countries, you can get a vast amount of all kinds of cheap but "decently spec'ed" mp3 players and computers. You could say Apple is not at all competitive based on price (but offers a lot of value), particularly given the weakness of those countries' currencies w.r.t the US Dollar. In China the MacBook Air 11" entry level is the equivalent of USD $1,200. I'm sure there are boatloads of netbooks or subnotebooks that are far below that price.

I'm not saying Apple doesn't try to be competitive in the countries they operate in, but fundamentally they do not price it lower than the equivalent in USD at the time the product models are released.

That is, I think this "premium" is to cover the currency fluctuations to always ensure their return in USD for every product is at least what they would get should the product have been purchased in the US. This "premium" of course varies depending on how competitive Apple can be, there is a range they can operate in but they do not drop below the USD equivalent.

Australia and Malaysia are cases in Asia Pacific whereby Apple products have been notoriously way beyond the prices of other MP3 players, phones, tablets and computers. If you think the "Apple tax" was bad in the US, it has been real rough in Australia in the past 10 years or so.

Even recently it would be hard to argue that Mac prices are "competitive" in Australia compared to PCs. But Apple doesn't compete on price that much. I mean, it's not stratospheric but it's never been cheap. It has become *more affordable* because the Australian dollar has strengthened a lot and maybe the premium has been reduced over time as Apple becomes more confident in the market.

Has Apple been successful in the Australian market? One would say, yes, but of course its market share is still small. I think Apple's policy is that it will not cede USD equivalent profit margins for market share gains in the countries it operates in.

Maybe someone who has been in Australia more recently or is currently living there can comment.

Well again, I think you need to get out of the currency exchange mindset. This is not the primary determinant of market pricing. Markets are.

An example: A luxury car maker will price their luxury cars to compete with other luxury cars, in every market in which they hope to compete. If the currency exchange rates become unfavorable, then they have the choice of passing along these costs in whole or in part to customers. Normally, they cannot do this and remain competitive, so they will eat at least some of the higher costs and accept lower margins. Conversely, if the exchange rates become favorable, they can either pocket the difference, or lower their prices. Normally they will at least attempt to do the former, for two reasons. First is the obvious one, which is increased profits. The second is that they don't want their luxury cars to begin competing on price with non-luxury cars, as this can devalue their brand or even shift them into a different car market. They may be forced to lower prices if their competitors are similarly favored by exchange rates, but nobody wants to be the first to price under the market for their goods -- maximizing profits being the name of the game, after all.

Apple's market position is similar. They sell premium products in every country, and this includes the US. This is deliberate positioning on their part. In every country Apple is constantly looking at the price for competitive products and making pricing decisions -- and like the luxury car maker, is trying to maintain their position in the market relative to other products and maximize profits. Making exchange rate comparisons substantially muddies an understanding of how prices are set within any given market. It adds a level of abstraction to what is actually a pretty simple calculus.

The bottom line is, exchange rates don't change how much you pay, at least not directly. The price of a product in your country hasn't gone up simply because your currency has become relatively stronger and you could buy that product for less in another country. If you want to get full value for your appreciated currency, you need to get on an airplane and spend that money in another country.

Well it appears Apple has dropped prices in Australia and this site at least thinks it is due to the strong AUD compared to the USD.

http://www.itwire.com/your-it-news/h...prices?start=1

See, this reinforces my point. I still believe exchange rates are the primary consideration in pricing Macs, but of course prices will be adjusted to be competitive within the range afforded but only after taking exchange rates into account.

Apple sells premium products in every country, agreed. However this premium is of course adjustable as Apple sees fit to maintain their position in the market, maximise profits, etc, but it is almost never set to anything below the US equivalent price.


The price of a product in a country might go up because the currency has become relatively *weaker*, not *stronger* at least in terms of Apple pricing considerations.

Yes, getting full value of the appreciated currency would involve purchasing the product in another country, but for example in the Australian drop in Mac prices, currency appreciation in a country can result in lower prices for Apple products in that country.

Note that the above article linked to also mentions that there is usually no repricing done mid-cycle in-between product refreshes, and that while it has become cheaper to purchase Macs in Australia, it has not come down below the pre-tax US price.

Repricing in Europe and Australia has been done because the US dollar has dropped markedly with risk appetite reduced due to quantitative easing in the US and the natural fall of the dollar due to the Fed essentially "printing money".

The USD is relatively weak in historical terms, and for many years now, been on a trajectory for it to become steadily weaker, with no change in the longterm trend is sight. The recent Fed action only reinforces the trend somewhat in the short term, but it did not create the trend. The weak dollar provides US companies with a competitive advantage, which is why the EU nations are so annoyed with the Fed's recent moves. But the general historical trend is why you see the price of Apple products almost always being higher outside of the US, at least as expressed in USDs.

But again, this is an abstraction, because people earn and spend their own currencies in their own countries. They pay the prices that their markets support, not the prices some other market supports as expressed in their currencies. If I convert my USDs into Mexican pesos I can still buy a lot of products in Mexico for less than I can in the US, because the peso is still relatively weak against the USD. But if I convert my USDs to Canadian dollars and go shopping in Canada, those same products will cost me a lot more, at least in terms of my own spending power. But the point is, none of this affects the prices of these products to Mexicans or Canadians when they buy at home.