The United Kingdom, Europe, Canada, and Australia are bearing the burden of the current economic climate.
We originally penned this article shortly after Apple introduced new iPad Pro models and a redesigned standard iPad on October 18 and subsequently raised prices for its entire range of iPads worldwide, excluding the United States. When Apple released new versions of the MacBook Pro and Mac mini, we predicted that prices would increase once more across the globe.
Apple has updated pricing for other Macs, including the 24-inch iMac, in conjunction with the release of the new MacBook Pro and Mac mini, as predicted.
This is good news for U.S. customers, whose prices have not increased, but not so good for everyone else, who must now pay up to £500/A$550/C$200 more for an iPad Pro or £450/A$350/C$150 more for a MacBook Pro.
The good news is that the Mac mini is an exception to this rule. Apple has decreased the price worldwide, not just in the United States. In addition to being $100 cheaper in the United States, the price has decreased by £50 in the United Kingdom, C$100 in Canada, and A$100 in Australia.
There is no denying that these price increases are a result of currency fluctuations, with all of the aforementioned currencies losing value against the dollar in recent months. Nor are the price increases unexpectedly; we had predicted that prices would rise in the United Kingdom and elsewhere, and had been encouraging customers to purchase before the release of new products.
In a time when the cost of living is rising at the fastest rate in forty years and inflation is soaring, the price increases are particularly difficult to stomach.
It’s not just the rising cost of food and energy that requires us to make adjustments. Other goods, especially imported ones, will cost significantly more than they did. The cost of purchasing U.S. goods in the United Kingdom and elsewhere is currently higher than it has been for decades.
How much have Mac costs risen?
For the MacBook Pro, the price of a Mac has increased by up to 6% in Australia, 6% in Canada, and 13% in the United Kingdom as a result of the price increases. The iMac is up as much as 12 percent in the United Kingdom, 5 percent in Australia, and 6 percent in Canada.
Is Apple ripping everyone else off?
Despite the cost implications of various supply and production issues in the post-pandemic environment, it is remarkable that prices have not increased in the United States. A skeptic may assert that Apple has prioritized its domestic market by increasing prices abroad to maintain stable U.S. prices.
On the other hand, Apple’s calculations may be correct. If currency adjustments are made to current U.S. prices and local taxes are added (in the U.S., tax is added at the point of sale, whereas in other countries, the price you see includes local taxes), the resulting figures are much closer to those of foreign countries. Apple would almost certainly refer to this additional expense as the “cost of doing business in your country.”
Therefore, we cannot blame Apple for the decline of various currencies against the dollar, but we can question anything above the price resulting from currency conversion and the addition of local taxes. Our calculators are out, and you can see our calculations below.
In light of the decline of the pound against the dollar over the past few months, £1 was worth $1.12 on October 19, shortly after Apple announced its new iPads. On January 1, the same pound would have purchased you $1.35.
At the exchange rate on the date this article was written (20 October 2022), a $329 iPad in the United States would have cost £293.75 in the United Kingdom. And when you add 20% VAT, you get £352.50, which is not too far off from the actual price of £369. Even though this is £50 more than what it cost at the beginning of October (£319), you are only paying £15 over the odds when the weak pound and local taxes are considered.
Intriguingly, the same calculation performed in January 2022 would have resulted in a converted price of £243.70, or £292.44 with VAT added: approximately £27 less than the price at the time, which was £319. Therefore, one could argue that Apple has absorbed more of the cost of doing business in the United Kingdom to keep the entry-level iPad as affordable as possible.
This is the least expensive iPad accounted for. The priciest iPad (iPad Pro 12.9-inch, 2TB, cellular) costs $2,399 in the United States, which converts to £2,141.96 in the United Kingdom and £2,570 when 20% VAT is added. It costs £2,679, which includes an additional cost of approximately £109.
This iPad Pro is £530 more expensive than the equivalent iPad Pro from January 2022 (£2,149) Back then, the converted amount, including tax, would have been £2,132, just £17 less than the actual price. In this instance, the real-term price increase is significantly greater, and we do not expect Apple to sell many 2TB 12.9-inch iPad Pros in the United Kingdom at the new price.
It is not only British prices that have increased. In Europe, the entry-level iPad of the ninth generation costs €429, while the premium iPad Pro begins at €3,024. Earlier this year, the equivalent prices for these models were €379 and €2,580. This represents a rise of €50 and €445 respectively.
Similarly, the euro has declined against the dollar over the past few months. Today €1 will buy you $0.98. Back on January 1, one euro was worth $1.14. Consequently, we now have higher prices due to the euro’s value against the dollar.
The cheapest iPad in Australia now costs $549. Before the launch of the iPad in October 2022, the starting price was $499. The most expensive iPad Pro previously cost $3,549; it now costs $4,099. This represents a difference of A$50 and A$550. In October 2022, one Australian dollar was equivalent to USD 0.63. On January 1, it would have purchased $0.73.
Even Canada experiences a price increase. The lowest-priced iPad is now $449, and the most expensive iPad Pro with 2TB and cellular is now $3,179. These costs were $429 Canadian and $2,975 for the 12-inch iPad Pro. This represents a C$20 and C$200 increase. In October, one Canadian dollar was worth $0.73, whereas, on January 1, it was worth $0.79; this is a decline, though not as significant as that of other currencies.
Who is at fault?
We cannot avoid the fact that currency fluctuations are a major factor in global price increases. Adding tax to an already inflated price will significantly increase the amount you are expected to pay.
However, there are factors at play beyond currency fluctuations and taxes. On its entry-level iPad, Apple appears to have taken a hit to reduce the price increase, whereas the iPad Pro models have experienced a real-terms price increase that cannot be explained by currency conversions. We assume the additional expenses are attributable to the cost of doing business in each country as well as other factors, such as the high cost of fuel and the expense of importing goods from China and other countries.
Outside of the United States, Apple products have been relatively affordable for several years. Now we are entering an era of unaffordability, which will undoubtedly have consequences for the company. Apple’s reputation as a purveyor of premium goods was already established; now, the company must prove that its expensive products are worth the price.