The Apple Tax In Canada

Critics of Apple products have long pointed to the “Apple Tax” as a crux of their arguements against the products.  Apple‘s gadgetry is consistently higher priced that similar products with similar horsepower.  Fanboys respond by touting the company’s esthetic qualities and point to the high profit margins that continously propel the stock.  (Disclosure, I am a small shareholder of AAPL)

This week’s announcements by Steve Jobs that pumped new life into the iPod line and his Apple TV ‘hobby,’ posed a curious currency calculation.  In his Stevenote, he presented American prices that are impressive.  $99 for the Apple TV is astounding.  $4.99 for first run movies is right on point.  $0.99 for tv shows is right in the wheelhouse to have people second guessing their cable subscriptions.

But those are American prices.  On September 1, the Canadian dollar closed at 95 cents US.  In the recent weeks, the currency charts have had our loonie between 93 and 97 cents US.  A premium between 5 and 10 percent should be factored in to the prices, but that’s not what Apple is doing with this latest product line.

The current Apple prices accurately reflect the current currency climate:

Product US Price Cdn Price C$ Premium
iMac $1199 $1299 +8.3%
Macbook $999 $1049 +5%
iPad 16GB Wifi $499 $549 +10%
iTunes Music $0.99 $0.99 -5%

The new product and price announcements take the Apple tax to new heights:

Product US Price Cdn Price C$ Premium
iPod Shuffle 8GB $149 $159 +6.7%
iPod Touch 32GB $299 $319 +6.7%
iPod Nano $49 $59 +20%
Apple TV $99 $119 +20%
iTunes Movies $4.99 $5.99 +20%
iTunes TV Shows $0.99 $0.99 -5%

Granted, Canadian consumers come out ahead of the game when we buy our music or rent our tv shows through Apple. In the long run, that may prove to be a big win if you consume a lot of content.  However, if you just do a straight currency conversion on the new iPod Nano, Apple TV and iTunes Movie pricing, you see a calculation that doesn’t make much sense.

Lovers of Apple products understand there is an Apple tax to be paid.  If you want the elegance of a BMW or a Mercedes, you’re willing to pay a premium for the privelege – same with Apple products.  The problem comes when the Apple tax is extended to an all out money grab with an off base currency conversion.

buzz bishop future shop tech blogThis post was originally published at The Future Shop Tech Blog.



Previous iTunes 10 Kills Compact Disc
Next Nik Lewis: CFL Twitter Superstar

1 Comment

  1. […] September 9 – Canadian Apple Tax […]

Leave a Reply