Originally Posted by Dr Millmoss
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.