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iPad challengers seen as having better chance in Europe - report

post #1 of 52
Thread Starter 
A new analysis claims tablet makers looking to compete with the iPad in the market may stand a better chance in Europe, though pricing could be an issue for Apple's rivals.

Research firm Forrester said on Tuesday that Apple's smaller retail presence in Europe poses an opportunity to competing companies including Samsung, Acer and Research in Motion, Reuters reports. The iPad maker has 52 stores in the region, compared to 238 in the United States.

"There is this opportunity for iPad challengers, but the competition is very fragmented. Competing with Apple will require a different approach from what we've seen so far," said analyst Sarah Rotman Epps.

But, in order to compete, competitors will need to cut their prices, as Apple's larger scale and efficient supply chain give it an advantage. "A competitor to Apple would have to put together the right content, the right price and the right channel strategy. There isn't anyone that has all three," she said.

"Manufacturers, retailers and operators we spoke with all commented on the failure of the first 7-inch tablets that attempted to compete with the iPad," Forrester said. "The newer generation of iPad challengers, such as the 10-inch Samsung Galaxy Tab and the Acer Iconia Tab, are getting better reception, but they're still at a disadvantage to Apple in terms of channel strategy."

The firm surveyed nearly 14,000 online consumers throughout Europe to find that between 2 and 7 percent of consumers surveyed own a tablet and 10 to 14 percent are interested in buying one. Tablet ownership was highest in Spain and lowest in France. Interest in tablets was highest in Germany.

Forrester sees Apple maintaining an 80 percent share of the tablet market in the U.S. and a 70 percent share in Europe in 2011. Europe is expected to account for 30 percent of worldwide tablet sales, which are forecast to reach 48 million units this year.

After first releasing the original iPad in the U.S. in April 2010, Apple quickly rolled the tablet out to several European countries. Apple's pricing results in a premium for European customers, who pay as much as $702 for the entry-level iPad 2, which costs $499 in the U.S.

Earlier this year, European regulators indicated that Google's Android operating system may help Apple avoid antitrust probes. The European Commission indicated that the touchscreen tablet market is "relatively new and evolving" and alternative platforms are emerging.

Apple sold 9.25 million iPads in the June quarter with growth of 183 percent year over year.
post #2 of 52
Apple is not paying so much attention to European markets.

Especially when you came to prices.


T
post #3 of 52
The smallest iPad in US is 499,- USD
In Denmark it's approx 735,- USD
post #4 of 52
Oh come on, clearly the US advertised price does not include tax, the Danish advertised price does. This comes up every time price comparisons to the US are made. Why are there still people having problems understanding this?
post #5 of 52
iPad challengers seen as having better chance in an Alternate Universe where Apple Headquarters was swallowed by an earthquake a year ago.


It should be clear now that Apple and the rest aren't competing: they are in different leagues.
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post #6 of 52
<Say it with me in a Spartan tone>They'd have a better chance....... in Hell!!!
post #7 of 52
Quote:
Originally Posted by TuckerJJ View Post

Oh come on, clearly the US advertised price does not include tax, the Danish advertised price does. This comes up every time price comparisons to the US are made. Why are there still people having problems understanding this?

well, its true. I just payed 1135€ for a 13 inch Macbook Air.this would have cost me 1599€ in the EU. 400+ euro more.
post #8 of 52
Judging by how difficult it was to find an iPad 2 in Europe within the first couple of months of release, I don't think that Apple will be worrying too much.
post #9 of 52
"14,000 online consumers throughout Europe to find that between 2 and 7 percent of consumers surveyed own a tablet"

How could they not know the exact %? Did 5% refuse to answer that question? In that case, it's just 2% - plain and simple.
post #10 of 52
Quote:
Originally Posted by stelligent View Post

"14,000 online consumers throughout Europe to find that between 2 and 7 percent of consumers surveyed own a tablet"

How could they not know the exact %? Did 5% refuse to answer that question? In that case, it's just 2% - plain and simple.

It's by country. - from Reuters coverage of the same story (http://in.reuters.com/article/2011/0...58684520110809)

'Between 2 percent and 7 percent of the consumers surveyed, depending on the country, said they owned a tablet, and a further 10 percent to 14 percent said they were interested in buying one.

Spain had the highest ownership and France the lowest, while Germans were most interested in buying a tablet. In Britain, where Apple has 30 of its European stores, ownership was relatively low at 3 percent.'
post #11 of 52
Quote:
Originally Posted by Mads View Post

The smallest iPad in US is 499,- USD
In Denmark it's approx 735,- USD

I'd be interested to know the details, can you break that down to how much of that extra $236 is going to Apple and how much is going else where such as taxes or whatever? Here in my city in Florida I pay 7% tax, i.e. I'd have to pay $534 not $499. That said, your extra $200 is a big difference. (all numbers rounded before the smart asses correct me)
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post #12 of 52
So it if the fragmented opposition to iPad would all get together and build lots of gorgeous stores filled with things people want, lower their prices and create a far better OS. Add a superb eco system like iTunes and agree to share the sales ... they may stand a chance?
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post #13 of 52
Quote:
Originally Posted by digitalclips View Post

I'd be interested to know the details, can you break that down to how much of that extra $236 is going to Apple and how much is going else where such as taxes or whatever? Here in my city in Florida I pay 7% tax, i.e. I'd have to pay $534 not $499. That said, your extra $200 is a big difference. (all numbers rounded before the smart asses correct me)

Sales tax in the UK is 20%, you also pay import duty as part of the price. it cancels out most of the difference, although prices are still slightly higher outside of the US.
post #14 of 52
Quote:
Originally Posted by Mads View Post

The smallest iPad in US is 499,- USD
In Denmark it's approx 735,- USD

Denmark's VAT tax rate is 25% isn't that included in the price?
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post #15 of 52
Price in US - $499 + tax
Swiss Price - $677 + tax

US Price in CHF - Fr. 374 + tax
Actual US Price - Fr. 508 + tax

US/CHF conversion at current FX rate of $0.75 = CHF 1.00

Apple is ALWAYS more expensive in Europe. It also releases products here later than the US, services are usually cut down in features, Apple Stores are a rarity in the EU, iTunes stores are not cross border (Amazon is) - I could go on but I've got a life!
post #16 of 52
Quote:
Originally Posted by SwissMac2 View Post

Price in US - $499 + tax
Swiss Price - $677 + tax

US Price in CHF - Fr. 374 + tax
Actual US Price - Fr. 508 + tax

US/CHF conversion at current FX rate of $0.75 = CHF 1.00

Apple is ALWAYS more expensive in Europe. It also releases products here later than the US, services are usually cut down in features, Apple Stores are a rarity in the EU, iTunes stores are not cross border (Amazon is) - I could go on but I've got a life!

Right on.

Well the swiss situation is currently beyond ridiculous, Euro is plunging, Dollar is plunging... And prices don't move a cent here.

If Apple made the same US prices here they would increase their market share beyond what they can dream of.

And, since all goods are made in China anyway, it's not like there's an added cost to bringing them here. Our VAT is currently 8%.
post #17 of 52
Quote:
Originally Posted by SwissMac2 View Post

Price in US - $499 + tax
Swiss Price - $677 + tax

US Price in CHF - Fr. 374 + tax
Actual US Price - Fr. 508 + tax

US/CHF conversion at current FX rate of $0.75 = CHF 1.00

Apple is ALWAYS more expensive in Europe. It also releases products here later than the US, services are usually cut down in features, Apple Stores are a rarity in the EU, iTunes stores are not cross border (Amazon is) - I could go on but I've got a life!

So it is fair to assume all of Apple's overheads are far higher too then.

Apple's iTunes store is probably not cross border because of complex licensing agreements Amazon don't have.

I could go on but ... ;}
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post #18 of 52
Quote:
Originally Posted by SwissMac2 View Post

Price in US - $499 + tax
Swiss Price - $677 + tax

US Price in CHF - Fr. 374 + tax
Actual US Price - Fr. 508 + tax

US/CHF conversion at current FX rate of $0.75 = CHF 1.00

Apple is ALWAYS more expensive in Europe. It also releases products here later than the US, services are usually cut down in features, Apple Stores are a rarity in the EU, iTunes stores are not cross border (Amazon is) - I could go on but I've got a life!

The Swiss franc has appreciated enormously against the dollar in the last few months, Apple doesn't change local prices to match exchange rates immediately, it does so periodically - the same as every other international retailer.

Your exchange rate is backwards, currently we are at 1USD =.74 CHF, back in March it was around .94CHF. Thus the apple price of 550 CHF has gone from $585 to $733 inclusive of tax.
post #19 of 52
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post #20 of 52
Quote:
Originally Posted by iMat View Post

Right on.
If Apple made the same US prices here they would increase their market share beyond what they can dream of.
.

What more than they have now? They'd have to do the maths on loss of profit against gain in market share by reducing margins.

I think Apple like a bit of other sales in the market, keeps the competition commission away.

FYI there is no import duty on computer products brought into the EEA/Swiss

iTunes cross border issues are down in the main to the labels and their licensing arrangements
post #21 of 52
Quote:
Originally Posted by digitalclips View Post

I'd be interested to know the details, can you break that down to how much of that extra $236 is going to Apple and how much is going else where such as taxes or whatever? Here in my city in Florida I pay 7% tax, i.e. I'd have to pay $534 not $499. That said, your extra $200 is a big difference. (all numbers rounded before the smart asses correct me)

The highest US Government per diem rate for meals is $71 in the US. The rate in London is $187.


Quote:
Originally Posted by SwissMac2 View Post

Price in US - $499 + tax
Swiss Price - $677 + tax

US Price in CHF - Fr. 374 + tax
Actual US Price - Fr. 508 + tax

US/CHF conversion at current FX rate of $0.75 = CHF 1.00

Apple is ALWAYS more expensive in Europe. It also releases products here later than the US, services are usually cut down in features, Apple Stores are a rarity in the EU, iTunes stores are not cross border (Amazon is) - I could go on but I've got a life!

Geneva $178, Zurich $201...

Quote:
Originally Posted by digitalclips View Post

So it is fair to assume all of Apple's overheads are far higher too then.

Apple's iTunes store is probably not cross border because of complex licensing agreements Amazon don't have.

I could go on but ... ;}

Far, far higher.

Denmark was mentioned earlier, the meals rate there is $161. The highest domestic rate in the US is $71. It is amazing how out of touch most Europeans on these forums appear, they do not understand the massive cost of living differences between their own countries and the US. Do a little traveling outside of your own little lands and you might have a new appreciation for global pricing differences...I could go on...
post #22 of 52
Quote:
Originally Posted by Mads View Post

The smallest iPad in US is 499,- USD
In Denmark it's approx 735,- USD

The Denmark price includes taxes. Apple's competitors also need to pay taxes. I don't see how this is an advantage.

This is purely a supply chain efficiency issue. Apple's competitors need a supply chain that is more efficient then them. These companies used to shop around and buy in small quantities to get the lowest price. They would just release a million different models all with different parts. Now that electronics are getting very small and highly integrated that approach doesn't work anymore. You need to have few models with massive market share to compete on price. Apple already has a high efficiency so they would be able to match anything that a competitor could do. Their competitors probably will only be able to hit a lower price point if they use slower chips. Now that dual-core chips are out I wouldn't be surprised to see this.
post #23 of 52
Quote:
Originally Posted by mjtomlin View Post

Denmark's VAT tax rate is 25% isn't that included in the price?

Yes, that would include the VAT.
post #24 of 52
Quote:
Originally Posted by Wovel View Post

The highest US Government per diem rate for meals is $71 in the US. The rate in London is $187.




Geneva $178, Zurich $201...



Far, far higher.

Denmark was mentioned earlier, the meals rate there is $161. The highest domestic rate in the US is $71. It is amazing how out of touch most Europeans on these forums appear, they do not understand the massive cost of living differences between their own countries and the US. Do a little traveling outside of your own little lands and you might have a new appreciation for global pricing differences...I could go on...

Yep. In fact Apple probably should release their cost of doing business per country as it relates to the cost of Apple products in those countries. I suspect many would get a shock and stop whining.
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post #25 of 52
Quote:
Originally Posted by lukei View Post

FYI there is no import duty on computer products brought into the EEA/Swiss

But if the iPad is considered consumer goods and not a computer product then there may be, see for instance http://www.nytimes.com/2010/08/17/bu...er=rss&emc=rss

In the EU at least the iPad is tariff free http://www.dutycalculator.com/blog/t...duty-for-ipad/
post #26 of 52
It's obvious that Apple is doomed!
post #27 of 52
Quote:
Originally Posted by Wovel View Post

The highest US Government per diem rate for meals is $71 in the US. The rate in London is $187.




Geneva $178, Zurich $201...



Far, far higher.

Denmark was mentioned earlier, the meals rate there is $161. The highest domestic rate in the US is $71. It is amazing how out of touch most Europeans on these forums appear, they do not understand the massive cost of living differences between their own countries and the US. Do a little traveling outside of your own little lands and you might have a new appreciation for global pricing differences...I could go on...

That's all relevant. You're also forgetting import duties. Also, depending on the shipping method, there are administrative fees. There is also a customs charge (as much as 30 Euro) for most European countries.

Comparing prices in one country to another country is meaningless. The only valid comparison is the price for Apple's iPad to a competitor's tablet in any given country.
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post #28 of 52
Quote:
Originally Posted by cloudgazer View Post

But if the iPad is considered consumer goods and not a computer product then there may be, see for instance http://www.nytimes.com/2010/08/17/bu...er=rss&emc=rss

In the EU at least the iPad is tariff free http://www.dutycalculator.com/blog/t...duty-for-ipad/

Tablets fit into the tariff code for computers. Arguably those with a 16:9 ratio might not do but that doesn't affect the iPad for now anyway.


Quote:
Originally Posted by jragosta View Post

That's all relevant. You're also forgetting import duties. Also, depending on the shipping method, there are administrative fees. There is also a customs charge (as much as 30 Euro) for most European countries.

Comparing prices in one country to another country is meaningless. The only valid comparison is the price for Apple's iPad to a competitor's tablet in any given country.


Customs charges? That's for single imports only, fades into insignificance for volume imports split across say 10,000 units.

However you are right that price comparisons can only be made on a like for like basis within that country. Costs of running a business, local consumer returns rights, exchange rates (do people seriously expect businesses to offer daily pricing linked to the USD exchange rate of the day?) and many other issues affect the cost of doing business in a particular country.
post #29 of 52
Quote:
Originally Posted by jragosta View Post

That's all relevant. You're also forgetting import duties. Also, depending on the shipping method, there are administrative fees. There is also a customs charge (as much as 30 Euro) for most European countries.

Comparing prices in one country to another country is meaningless. The only valid comparison is the price for Apple's iPad to a competitor's tablet in any given country.

I hadn't heard of the customs charge - that's per shipment presumably?
post #30 of 52
Quote:
Originally Posted by AppleInsider View Post

But, in order to compete, competitors will need to cut their prices, as Apple's larger scale and efficient supply chain give it an advantage. "A competitor to Apple would have to put together the right content, the right price and the right channel strategy. There isn't anyone that has all three," she said.

The big challenge here is what I presume is grouped under 'content'. The apps (app-store), the developers, the accessory eco-system, the network infra structure and services (iCloud), iLife etc
post #31 of 52
Quote:
Originally Posted by Titan10 View Post

Apple is not paying so much attention to European markets.

Especially when you came to prices.


T

Actually it is more like the shitty value of the dollar and import levies that are mucking with pricing.

And this group is wrong. There might be a smaller number of stores in Europe but they are some of the biggest in terms of being tourist sites. Plus there's online and tons of 3rd party shops and tourists buying in the US and dragging iPads and iPods home with them.

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post #32 of 52
Quote:
A competitor to Apple would have to put together the right content, the right price and the right channel strategy. There isn't anyone that has all three," she said.

This is like that old SNL skit in which the track coach is trying to motivate his runners by telling them that to win, they have to run really, really fast.

I think Apple's competitors know what they need to do to win. They just can't do it.

It's amazing that analysts get paid to say this bullshit. It's the same thing you hear out in the street, possibly in a dark alley, yet you sprinkle it with Harvard-level words and you're suddenly a well-heeled analyst.
post #33 of 52
Quote:
Originally Posted by cloudgazer View Post

But if the iPad is considered consumer goods and not a computer product then there may be, see for instance http://www.nytimes.com/2010/08/17/bu...er=rss&emc=rss

In the EU at least the iPad is tariff free http://www.dutycalculator.com/blog/t...duty-for-ipad/

An interesting differentiation. The iPad clearly is a computer product, but one is being marketed and sold as a consumer item. It is also equally a consumer computer items and business computer item.
post #34 of 52
Quote:
Originally Posted by AppleInsider View Post

Research firm Forrester said on Tuesday that Apple's smaller retail presence in Europe poses an opportunity to competing companies including Samsung, Acer and Research in Motion, Reuters reports. The iPad maker has 52 stores in the region, compared to 238 in the United States.

52? What a silly mistake to make. There are many Apple Resellers who are independent and who collaborate with Apple (e.g. to be a reseller you have to have your store in Apple Style), they work as tech support (e.g. repairs) for stuff sold through Apple Online, etc.

I would be surprised if not every place over 50k inhabitants in The Netherlands has at least one Apple (Premium) Reseller. And they are just as well "Apple retail presence" and have grown enormously on the power of Apple's product success.
post #35 of 52
Quote:
Originally Posted by Mads View Post

The smallest iPad in US is 499,- USD
In Denmark it's approx 735,- USD

Prices are higher in Europe. Some of it is taxes (VAT) which hurts other suppliers as well. Some might be currency insurance. The cost of doing business in Europe is probably higher too. For instance, EU consumer protection offers more protection (the wording of Apple Care in The Netherlands is especially telling. You are told at the end hat the protection does not come in the place of legal protection. What they do not tell you is that legal protection covers 90% of what they offer you for a price ;-)

iPad US: $499 without tax.
iPad DE: $570 without tax (479 * 1.42 / 1.19)

Galaxy Tab 10.1 16GB amazon.com: $499.99 without tax
Galaxy Tab 10.1 16GB amazon.de: $686 (574.89 * 1.42 / 1.19)

It seems the Galaxy Tab 10.1 carries a far greater EU-price hike than the Apple iPad. Funny, that. How much is that 16GB Galaxy Tab in Denmark compared to the 16GB iPad?
post #36 of 52
Quote:
Originally Posted by gctwnl View Post

It seems the Galaxy Tab 10.1 carries a far greater EU-price hike than the Apple iPad. Funny, that. How much is that 16GB Galaxy Tab in Denmark compared to the 16GB iPad?

The 32GB 10.1 seems closer to the iPad-2 price, though still a little more. The 16GB 3G+Wifi 10.1 is the same price as the iPad. The 16GB Xoom seems to be about the same as the iPad-2, quite a lot less if you're willing to go with one of the dodgy amazon market partners.

Basically Apple is defining the market price for tablets right now, everybody else is just about keeping up.

Edit: Latest legal news kinda invalidates the whole 'android tablets may do better in europe' idea.
post #37 of 52
Quote:
Originally Posted by gctwnl View Post

52? What a silly mistake to make. There are many Apple Resellers who are independent and who collaborate with Apple (e.g. to be a reseller you have to have your store in Apple Style), they work as tech support (e.g. repairs) for stuff sold through Apple Online, etc.

But do they "make iPads?"
No?
Guess their stores don't fit the criteria then.
post #38 of 52
Quote:
Originally Posted by AppleInsider View Post

A new analysis claims tablet makers looking to compete with the iPad in the market may stand a better chance in Europe, . . .

Just don't count on the Samsung Galaxy leading the way:
post #39 of 52
Quote:
Originally Posted by AppleInsider View Post

A new analysis claims tablet makers looking to compete with the iPad in the market may stand a better chance in Europe, though pricing could be an issue for Apple's rivals.

Research firm Forrester said on Tuesday that Apple's smaller retail presence in Europe poses an opportunity to competing companies including Samsung, Acer and Research in Motion, Reuters reports. The iPad maker has 52 stores in the region, compared to 238 in the United States.

"There is this opportunity for iPad challengers, but the competition is very fragmented. Competing with Apple will require a different approach from what we've seen so far," said analyst Sarah Rotman Epps.

But, in order to compete, competitors will need to cut their prices, as Apple's larger scale and efficient supply chain give it an advantage. "A competitor to Apple would have to put together the right content, the right price and the right channel strategy. There isn't anyone that has all three," she said.

"Manufacturers, retailers and operators we spoke with all commented on the failure of the first 7-inch tablets that attempted to compete with the iPad," Forrester said. "The newer generation of iPad challengers, such as the 10-inch Samsung Galaxy Tab and the Acer Iconia Tab, are getting better reception, but they're still at a disadvantage to Apple in terms of channel strategy."

The firm surveyed nearly 14,000 online consumers throughout Europe to find that between 2 and 7 percent of consumers surveyed own a tablet and 10 to 14 percent are interested in buying one. Tablet ownership was highest in Spain and lowest in France. Interest in tablets was highest in Germany.

Forrester sees Apple maintaining an 80 percent share of the tablet market in the U.S. and a 70 percent share in Europe in 2011. Europe is expected to account for 30 percent of worldwide tablet sales, which are forecast to reach 48 million units this year.

After first releasing the original iPad in the U.S. in April 2010, Apple quickly rolled the tablet out to several European countries. Apple's pricing results in a premium for European customers, who pay as much as $702 for the entry-level iPad 2, which costs $499 in the U.S.

Earlier this year, European regulators indicated that Google's Android operating system may help Apple avoid antitrust probes. The European Commission indicated that the touchscreen tablet market is "relatively new and evolving" and alternative platforms are emerging.

Apple sold 9.25 million iPads in the June quarter with growth of 183 percent year over year.

I don't think so, as Apple just won an injunction against Samsung's Galaxy Tab for Patent infringement. Galaxy Tabs must be pulled off of store shelves and not to be sold in Europe.
Making an iPad look alike is now a very BAD IDEA. Apple said it would protect its intellectual property and it is doing so. If you want to be an innovative company then do it yourself, not at the expense of Apple making copycat wanna be products that are slow and confusing.
post #40 of 52
The Europeans don't enjoy the huge gap between rich and poor that we've built for ourselves here in America. Our poor expect nothing and receive essentially nothing from their government. Our rich give nothing to our government. The dwindling middle class delude themselves that they'll soon be joining the rich as most of them drop away to the poor column. It is an excellent system that keeps taxes and, correspondingly, iPad prices, low.

Instead, in Europe, they have this messy middle class that feels entitled to health care, public education with highly skilled teachers, 6-week vacations, high speed mass transit, law enforcement, fire fighters, paramedics, and livable retirement benefits. All that messy stuff translates to higher taxes and, correspondingly, higher iPad prices.
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