Last Wednesdsay, we all know, Steve Jobs has made his last appearance “on stage” to present the biggest evolution ever in the iPods lineup. He also presented the latest evolution of the Apple TV, the new iOS 4.1 and the forthcoming iOS 4.2 for iPads.
But, the online Apple Store showed some little changes too. For the new iPods, on the European Apple sites you can read the actual product price, and also the taxes amount paid for that product. As an example, if you go to the spanish Apple Store and look for an iPod shuffle, you will see that its price is € 49, which includes € 11 for “VAT, duty and levies”. Same story for the italian store, the french one, the english one, etc.
Some bloggers around the world, here and there, started comparing prices between the european stores and the american one, using the prices that Jobs kindly exposed to us. I too tried to make the same. Here is how, and later come the results.
Mean fee % estimation
I compared the prices of all the products, starting from the new prices of the iPod family. These products are the only ones for which we have the real price and the “real” fees. Starting from these ones I tried to calculate a mean fee percentage, which I will use in later comparisons. All the prices have been normalized, using the current EUR/USD, GBP/USD and CHF/USD changes, as shown on Google. I chose to compare prices from: Italy, France, Germany, UK, Spain and Switzerland. This is the result:
The calculus is really simple: the fee % is computed as: (fee / price) * 100. Then I made a mean over the 6 different fees percentages, one for each new iPod product. As we can see, France and Italy lead the group having the highest fees, while Switzerland has the lowest one. Not so much time ago we noted that Switzerland has also one of the lowest iPhone 4 prices on Earth …
iPod margin gain
I wanted to know how much Apple is gaining selling products in Europe instead of selling them in the USA. If you take the (let’s say) italian price for an iPod touch and convert it in USD, you will see a huge difference. An iPod touch 8GB costs in Italy € 239,00, which is approximately $308.00; but in the US the same iPod costs $229. That’s a +34,5%! But, we now know that in Italy we are paying € 47 in VAT etc. for that iPod. This lowers the “crude” price to € 192,00, which is approximately $247. A more convenient +7,86%. So apparently Apple is gaining at least a 7% selling an iPod touch in Italy instead of selling it at home. Now, if you repeat this reasoning for all the iPods and all the countries, you get the following:
As we can see, Apple is gaining really well selling products in Europe, having a mean +7% gain. Also strange is the fact that Apple seems to be losing something in Spain, selling the iPod shuffles. -0,12%. That’s a really small difference, but makes us smile for a while. (And makes me think that Apple is not being that fair with those numbers shown on the Apple Store).
Comparing the hot product: iPads
We can now go further. I used the approach described for calculating gains and the approach for calculating fees % combined together. This way I hope to be able to compute an estimated gain referred to the latest Apple’s jewel: the iPad. This is what I got:
Apparently, this whole estimation approach is somewhat wrong. I strongly believe that Apple has pumped the prices on the Apple Store in a non linear manner. I hope that they will show in future the level of detail shown for iPods also for all the other products. Just to know what Apple is doing in the European Market.
Probably I will extend this post comparing the remaining products: iMacs, Mac Pros and MacBook (Pros). Keep in touch!