“Apple raised prices in a number of overseas markets on Tuesday, a move precipitated by the U.S. dollar’s continued rebound and designed to minimize the effect of foreign exchange headwinds,” AppleInsider reports.
“Prices in France, Germany, Ireland, Italy, and other European Union nations increased by as much as €600 ($669),” AppleInsider reports. “Canadian consumers will see prices rise up to CA$400 ($327), depending on the product in question.”
AppleInsider reports, “Tuesday’s moves come just over two months after the last round of increases.”
Read more in the full article here.
MacDailyNews Take: Expected.
Of course, we expect this headwind to continue. And on a sequential basis, when we look into the June quarter, we expect to see another 40 basis points of negative impact from currency. We’re dealing with these headwinds as — they are part of business. And so we’re dealing with them in many ways. We are looking at, in some cases, the potential to increase prices in certain markets. We’re looking, of course, at our cost structures and we tried to remain as competitive as possible. — Apple CFO Luca Maestri, April 27, 2015
These are the realities of the global markets and the inherent currency fluctuations. The negative impact of the strong dollar is somewhat offset by the cheaper labour cost in China (for the same reasons).
Great just when I’m about to replace my melting 17″ Macbook Pro.
As an UK citizen, this saddens me a bit. If you live in the U.S. then please see my view. The biggest fleece with this is that Apple don’t repatriate their cash, so it shouldn’t make any difference. Of course perhaps one day they would like to bring their cash home, and they may make a loss (or a gain) depending on the market at that time. But if you factor the money they keep abroad that they will spend in those currencies on new Apple Stores, Marketing, Data Centres etc. then the value of the dollar makes absolutely zero difference. If they bring the money home at all. Currently the dollar is very strong (outside of the states) but the actual value of the dollar is less at home. The dollar is at its best, yet the U.S. government keep printing more money to keep the economy afloat. This can’t keep happening each time they hit the cliff. Printing more money waters the value of the currency down. If they keep doing this then eventually the dollar would be worth less than toilet paper.
Will Apple vastly reduce the price of their products in the UK and else where around the world because the dollar lost value? Does it work both ways? My American friends here, please don’t attack! I would love to hear fair views from readers living in and outside of the states.
Why is the richest company on Earth becoming so rapacious? What happened?
Apple’s accounting is in US dollars. In the first quarter they took a $3.7B loss on currency fluctuations alone. That’s well above the acquisition price of Beats, so it’s important money. Raising prices obviously hurts sales, so of course they will reduce prices when the dollar inevitably weakens.
I live in Thailand, and I’m feeling the same thing you are. Prices used to be equivalent to the US, but now they are significantly higher. I put off purchasing a new Macbook Pro because of this.
No doubt Apple is not happy about this, but they can’t absorb $3.7B losses every quarter. That’s more money than nearly every other company’s total earnings.
Because Apple has become just another giant corporation chasing maximum profits. Loyalty, quality and civic duty count for nothing in the new Apple.
sorry, but i don’t understand why a STRONG dollar requires price increases abroad.
a WEAK dollar would require price increases, not a strong dollar.
No… to simplify:
1 USD = 1 EUR
1 MBP = 2000 USD
1 MBP = 2000 EUR
USD becomes stronger:
1 USD = 2 EUR
1 MBP = 2000 USD
1 MBP = 4000 EUR
By your logic, we will decrease prices:
1 MBP = 1000 EUR
1000 EUR = 500 USD?
Everyone is coming to Europe to buy their Apple products! 75% off due to MDN commenter’s enlightening economic principals.
As the dollar becomes stronger, it takes more foreign dollars to make up the same value, basically.
So you completely ignored my comment about (whilst what you said is correct) the very widely accepted fact that Apple don’t repatriate their cash earned in Europe. So do your maths thing again – the dollar can go where it likes, if 1,000€ is earned in Europe and the dollar doubles/or halves – 1,000€ is still worth exactly 1,000€ in Europe. Only and if only Apple want to bring it home and give circa 30% of it to the system which they don’t and never will, or will ever need to.
Otherwise is it the benign policies of very different and callous Apple.
Every once in a while, someone posts on here without realizing how obvious they make it to a huge number of people how little they understand and how clueless they are about their level of arrogance.
Case in point ~ Proof.
The RMB is pegged to the US$, so as the $ strengthens, cost of production rises compared to prices in Europe
Asa Canadian and AAPL shareholder I fully understand that Apple Inc., headquartered in California, must file financial statements denominated in U.S. dollars which means the company must comply with U.S. accounting standards. If, for example an iMac sells for $2,000 in the U.S. that is the amount recorded as revenue. The same Mac, if sold at $2,000 in Canadian currency, would be translated at $1,600, allowing for the 20% discount on the C$. In order to have the Canadian sale come in at the same revenue dollar, the Canadian price, in Canadian dollars, has to equate to an amount which when discounted by the exchange rate would approximate the value of the same sale in the U.S. What is it that is so difficult to understand about this?
Nothing. Accept that..based on your above explanation – it doesn’t work both ways. When the Canadian dollar raises above the USD, you won’t see a discount in your Canadian stores?
Can you explain that?
Actually, for awhile I believe we did see our Canadian pricing at par with the US pricing. That was certainly the case in the App store as well. Though, I guess technically you are correct, our prices were never lower, just at par.
You should see the traffic between the people living in border states go between Canada and the USA depending upon which countries dollar is stronger.
If Apple expenses increase because of strong dollar, then Apple is going to raise prices.
For European customers, if European costs rise, the European prices rise.
Until we see contracts or a clearer logical explanation online somewhere, I withhold judgment. That means spreadsheets of balance statements or income statements or cash flow or all of those.
As mentioned above, some European customers are highly dismayed.
If the dollar increases in value; then how does Apple’s expenses increase?
The rise of the dollar, increases Apple’s expenses by zero in the states*.
The rise of the dollar decreases Apple’s expenses else where.
It WOULD decrease the value of their abroad profits, if and only if they returned that money home.
They don’t.
And they don’t pay income taxes in Europe. (Not for long).
* I wasn’t attempted to poke fun at America when I used the term “states” above to describe it. 😉
You have flawed logic and arrogance. Nobody can argue with an idiot of your caliber.
Here is my BIG issue, when the Us Dollar is strong we as Canadians are told we have to pay more because of the dollar, but when Canadian dollar was at and/or above par we were still paying a premium and we are told the price does not reflect the exchange it is at “market pricing” which basically means, were are screwing you because we can.
Here is my BIG issue, when the Us Dollar is strong we as Canadians are told we have to pay more because of the exchange, but when Canadian dollar was at and/or above par we were still paying a premium and we are told the price does not reflect the exchange it is at “market pricing” which basically means, were are screwing you because we can.
The EU will be starting another investigation now.