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How much Mac for your buck? USA, Europe and Australia compared

How much you pay for your Apple Mac products depends greatly on where you live. This we already know, but how big that difference actually is may come as a shock to many. We looked at the prices in the United States, Europe and Australia and found some pretty substantial differences.

Why do this comparison?

As you may know, Pingdom is based on Sweden (the country of IKEA, Volvo and yes, blond girls), and we are constantly amazed that the prices tend to be so much higher for Macs here than they are in the United States. We decided to get some actual numbers on how much of a price difference there really is on average.

Apple isn’t the only company having different prices for different regions, but we used them in this article since A) we like Apple’s products, and B) the products are well known and mostly identical all over the world. You could say it’s our version of the Big Mac Index, but with Apple products. Let’s call it the Apple Price Index. (We were tempted to call it the “iMac Index”…)

How we compared the prices

We looked at the prices for 17 Apple hardware products (computers) as well as the price of Mac OS X and Office 2008 for Mac.

For Europe, we didn’t check all countries. We included prices from Sweden, United Kingdom, Spain, Germany and France and averaged those.

Prices were taken from the Apple Store websites specific to the different countries, and we didn’t include taxes such as VAT to make the comparison fair to Apple (they don’t have control over taxes…).

We translated all prices to US dollars according to the current exchange rates (as of August 11, 2008).

Price comparison: USA vs. Europe

Based on the products we looked at in this survey, European consumers pay an average of 18.7% more for their Mac products than US consumers. For a thousand-dollar product, that is $187 that could have been used for something else.

On top of this, Europeans generally pay much more VAT than people do in the US. For example, Swedish consumers will have a 25% VAT added on top of the basic price and UK consumers will have a 17.5% VAT added. VAT is only paid by consumers, though, so companies buying Apple products won’t be affected by that part.

But poor Australia!

We thought we had it bad here in Sweden, but when we looked at the prices for Macs in Australia we couldn’t help but feel a bit sorry for them.

Australians pay a whopping 26.5% more on average for their Macs compared to Americans. For a thousand-dollar product, that is an additional $265 that an Australian would have to pay compared to an American. And that’s US dollars, not Australian.

From what we understand, Australia also has something similar to VAT that will add 10% on top of that, which is still more tax than you would pay in the US.

The Apple Price Index

We used a base price of $1,000 (one thousand) to illustrate the price difference between the different regions. Of course, Apple doesn’t have a product that costs exactly one thousand dollars in the US, but it’s a nice round number to use as a base.

So, if you want a thousand dollars worth of Mac, based on US prices, this is what you end up paying in the different regions (excluding tax):

  • USA: $1,000
  • EU: $1,187
  • Australia: $1,265

Apple Price Index

Largest and smallest differences

We didn’t check the price for all Apple products, but here are some observations on the prices of the products we did check.

(All comparisons are against the US prices.)

Really big differences:

  • Apple TV, the 40 GB version, is 59% more expensive in Europe and 73% more expensive in Australia.
  • Office 2008 for Mac (admittedly a Microsoft product, but it’s sold on the Apple Store website) is 62% more expensive in Europe and 44% more expensive in Australia.

Smaller differences:

  • Mac Mini 1.83GHz is “only” 6% more expensive in Europe, but 25% more expensive in Australia.
  • Mac OS X on the other hand is 22% more expensive in Europe, while “only” 8% more expensive in Australia.

Why such a big difference?

Perhaps localization could be one factor affecting the price. Out of the European countries, the UK had the lowest prices. USA and the UK are both English-speaking countries, so perhaps localization comes into play here. On the other hand, Australia is also an English-speaking country.

Distance could potentially be a factor, especially for Australia. Perhaps freight costs can explain part of the price difference?

Another factor affecting prices could be differences in custom duties/fees between the different countries.

And perhaps sheer market size is also a factor. The US is a huge market, so perhaps that allows Apple to cut prices since such large volumes are handled. Or perhaps Apple simply has a larger profit margin in Europe and Australia? In other words, does Apple charge more outside the US because “they can”?

To summarize, here are some theories for factors causing the price differences:

  • Product localization.
  • Freight costs.
  • Larger market in the US.
  • Custom duties/fees.
  • Different profit margin in different regions.

We hope that someone out there knows the actual answer and will tell us in the comments, because we honestly don’t know. :)

And even if you don’t know for sure, we would love to hear your thoughts on this.

For the curious:

The products we looked at were two different kind of Apple TVs, two kinds of MacBook Air, three kinds of 13-inch MacBook, three kinds of MacBook Pro, two kinds of Mac Mini, four kinds of iMac, a Mac Pro 8 core, Mac OS X 10.5, and Office 2008 for Mac.

For a list of the included products and their prices per country, you can download an Excel file we have included here.



22 Comments

Not only are prices higher in Europe, but IMHO salaries are higher in the USA than in EU. That would make the difference hurt even more. AND we pay higher taxes in addition to that!

I should add that I live in Europe, by the way. :) And nice article! You have confirmed my suspicions…

This is not very conclusive. Since when is the US a bigger market then the EU? And because all mentioned countries are member of the WTO, tariffs shouldn’t really be an issue here. Same goes with transport costs: Many Aplle-products aren’t even manufactured in the US, but rather in Asia or easter european countries.

given that Apple manufactures and ships directly out of China, Australia should not be so far that freight costs would stack up.

In brazil, one macbook air cost around 4,000 dollars (in today currency).

I never had an ipod, nor any mac products, we have massive products taxation

Well duh?! What is cheaper in Europe or Australia than the US…gas nope, televisions, hmmm… nope. What about autos, nope. Oh I know whats cheaper in Europe, SOCIALISM.

Although I am an american and of course live in the US, my wife is from the Philippines, and we have a 2nd house there (in Quezon City — a suburb of Manila), and someday will retire there — today we are lucky to get there once a year. When we do that, we will probably spend about half time there, and the other half at our home here in San Jose, Calif. But here is where I have my 24″ iMac, which is too big and delegate to ship there — certainly not back and forth as we go back and forth from here to there. So I will need a 2nd Mac there — I can’t imagine life without one near me at all times. But I have been wondering how much it would cost me to buy one there. Can you add cost figures for other countries where Americans are prone to spend long periods of time.

Incidentally I have found Amazon.com to be the best bargain with the lowest Apple product prices that I have found anywhere — especially when compared to prices at he local Apple stores. But many products there carry the caveat that they cannot be shipped outside the US. I consider this to be in restraint of trade, and should not be allowed under our legal system here.

No hpkdo, I don´t think the democratic system has got anything to do with it. Do you then say that the large price increase of gas in the US during the last years, is due to the truly capitalistic system and republican rule?

However, I think SOME price increase can be due to the fact that country customization is involved, translated documentation, keyboard, longer warranties etc. But probably the major issue is supply and demand.

It all comes down to EU vs USA. Atleast when we talk about the european prices.

The UK, Sweden, France, Germany and Spain are all in the EU customs union, so the external customs tariff is the same for imports to all of these countries.

As you say though, the UK generally always has the lowest prices on Apple products in Europe, even after VAT is stripped out. Why this is I would definitely like to know.

I doubt Apple specifically includes a localization penalty in its pricing – and the Spanish language is actually used in the US as well.

I suspect they just charge what they can get away with in each market (although aren’t the ex-VAT prices in the eurozone countries – so France, Germany and Spain in this study – now harmonized?).

I am surprised that no one yet has mentioned price strategy, every company tries to make their customers pay as much as they are willing to pay. Anythig else would be inefficient – if you think an iMac is worth 2000 USD why should the manufacturer not try to make you pay that price?

perhaps customers in Europe, an Australia are used to higher prices for this type of goods and thus are willing to pay more than in the US.

You know even Apple is doing this to earn money!!

Happy owner of a 24 iMac + iPhone bought ridiculously expensive in Sweden! …hmmm but anyway I must have thought it was worth the price…I had plenty of personal computing alternatives….

Charles Wilkes:
Have you considered to buy a MacBook in the US, and a separate 24″ monitor in the Philippines ?

“I suspect they just charge what they can get away with in each market”
But if they lowered the prices by 10 % maybe the number of sold items would be much higher ?
I have tried to switch my parents to Mac for over a year, but the iMacs are too expensive for them, and the Mini is the option if Apple upgrades it.

Freight? Australia is way closer to China and Malaysia than those other markets . . . are there price variations within the EU? Sounds like it . . . those recults might have been interesting to see.

Cheers,
-danny

I believe the answer is to do with economies of scale, and the cost of doing business in each country.

If Apple shipped generic products to all countries from a single office and a single warehouse and provided support from a single location and had a single international advertising campaign, then the prices would probably tend towards eachother- not least because entrepreneurs would start to exploit any price differences by shipping between countries.

The fact is, Apple has entire distribution organisations in each country, which have to be paid for. The bigger the market, the smaller the cost of this organisation relative to total sales, so prices can be lower.

Each organisation will have varying costs, depending on the cost of doing business in each country. Some countries have relatively high taxes, employment costs, rents, etc – and these all increase the cost of doing business which ultimately increases the prices if APple is to maintain its margins.

Yours truly

Gary Hodes

I’m sorry, but reality for the Australians isn’t as bad as the article tries to point out. In the excel file the prices for Apple products in Australia are actually WITH the VAT, as opposed to without for all the other countries. So the comparison isn’t really fair. Macs are in fact cheaper in Oz than in Sweden. (As we say in Swedish: Gör om, gör rätt! :) /Angus, swede living in Oz atm

Hi,

Does anyone know the apple product prices in for example India or Hong Kong?

You Americans, Europeans and Aussies have such great luck with your LOW Mac prices.

We in Israel pay the following (translated into USD):
MacBook 13″ white, basic, USD 1,790
MacBook Air, 1.8 GHz, 80 GB HD, USD 3,380
iMac 24″ 3.08 GHz, basic, USD 3,750

FYI: all Macs come from Macs central warehouse in Ireland or straight from Taiwan. There are NO import duties on computers in Israel.

Mind you: these prices are lower now than a year ago when the official importer charged about double, causing lots of Israelis flying to the USA to buy their Macs over there.

The theory I heard was that the Australian Dollar versus US dollar is very volatile, and since Apple doesn’t change its prices once stated, they had to factor in any possible changes in exchange rate so that no matter how it changed Apple would still make a profit in USD.

Australia’s listed prices include 10% GST, like the UK 17.5% VAT, while US prices do not include the variable state sales tax. Mind you, all the prices have gone up bigtime in the last 6 months since the AU$ went down to ~US$0.64. Still cheap iPods here though, as the prices were set when the AU$ was high.

@Hpkdo what a moron!