Apple Charges More Money For Its Products In Europe. Why? (2024)

FAQs

Apple Charges More Money For Its Products In Europe. Why? ›

A key reason for the higher prices is that VAT is included in the European figures, whereas extra fees are added after purchase in the US. Tax rates depend on which state you're in, but these generally sit between 2.9% to 7.25%.

The Numbers Don't Lie

In the U.S., the iPhone 14 Pro Max comes in at $1,100. In the UK, it's £1,199, and in Germany, it's €1,449. When converted to dollars, that's $1,385 in the UK and a staggering $1,450 in Germany. And it's not just the Pro series; all standard iPhone models in Europe have seen price hikes.

Corporate Takeaway: Branding and Perceived Value

In the corporate world, strong branding can command higher prices. Apple's ability to convince customers to pay a premium is a lesson in the power of branding and perceived value.

The UK often pays higher prices for both hardware and software compared to other countries since they have higher taxation rates on imported goods. This means that when you add up all the costs associated with a Mac purchase in the UK, you will find a much higher price point than elsewhere.

One reason is that Apple is a premium brand that is known for producing high-quality products with cutting-edge design and technology. As a result, Apple is able to charge a premium price for its products, and many consumers are willing to pay that price for the perceived value and benefits that Apple products offer.

The biggest difference in many countries is that the US price don't include the taxes while including them is standard in most of the world. After you exclude taxes the price is still cheaper in US due to things like currency exchange rates, import taxes and many other local taxes for imported goods.

Europe had an operating profit of $14.4 billion on sales of $44.3 billion in 2017. This represented 23.2% of Apple's total profits. The segment's margin was 32.6%.

It is imported and there are costs that go along with that. Apple is a global company and phones are built in China but Apple is a company that is headquartered in the U.S. Tax is included. Many times in Europe they have a longer warranty depending where you live.

Using Apple as the example, iPhones are significantly cheaper in the US than the UK, bought from Apple they are supplied unlocked and then you can put a UK SIM card and service into it.

Why does Apple increase prices? ›

Capture Value by Pricing Along the Demand Curve

Apple is not interested in giving consumer surplus to customers willing to pay a higher price. Pricing the iPhone along the demand curve delivers that value to shareholders.

Apple's most expensive products, such as the 2023 Mac Pro priced at $7,500 and the 1980 Apple III adjusted to $26,230, reflect its commitment to pioneering in technology!

One thing is very clear: If you want to buy an unlocked iPhone, buy it in the US! You'll save a lot of money. In most cases, the cost of an unlocked iPhone bought in Europe (even adjusting for VAT/sales tax) is over $200 more expensive than one acquired in the US. See the cost comparison chart above.

UK have the best prices of all Europe. It followed by Luxembourg, and few eastern Europe countries. Germany, Spain, France and Portugal have slightly better prices than nordic countries, which consistently on the expensive side.

CANBERRA (Reuters) - Britain and Europe are the world's costliest places to buy Apple Inc's new iPad computer, with prices around a quarter higher than in the United States, a new study has found.