Apple and the price of Brexit

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Billy

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17 August 2016 | 0

Billy MacInnesI blame Apple. There, I’ve said it.

Don’t blame me, Irish Apple resellers or retailers. I try to be as loyal to the local channel as I can, but it really isn’t my fault this time. Honest.

Before any of you declaim ‘Et tu, Billy?’ tell me what someone is supposed to do when they can buy an iMac for 20% less (a saving of more than €300 on this particular model) by driving just over 70km up the road?

Admittedly, it didn’t quite work out that way for me as I drove all the way to Derry and then, thanks to a banking glitch, couldn’t get the iMac that day. In any case, I could have saved myself the trip and travelled exactly 0km by sitting in front of my ageing, soon to be replaced iMac and clicking ‘buy’ on a UK Apple partner’s website. Which is what I did.

Okay, so in this age of instant gratification, I’m going to have to wait a couple of days or so for the iMac to arrive but, to be honest, given where I live in Donegal, I’m used to waiting a few days for any order on the Internet to arrive.

So how come the option of buying an iMac from the UK suddenly became so much more attractive? This is where Apple comes in. Despite the fairly rapid decline in value of sterling against the euro and the dollar, Apple has kept its UK pricing at the same level. This means that the cost of a £1,049 iMac model has reduced with the sterling v euro rate from €1,510 when it was introduced in October last year to €1,206 today. During that period of sterling’s relentless decline, the price of the same iMac model in Ireland has remained unchanged at €1,549.

The way I look at this is that Apple is making a bad job of sorry situation. First off, it’s making Irish partners far less competitive against UK rivals, allowing a price differential so pronounced that it would be madness for Irish customers that could buy iMacs in the UK to do anything otherwise. Secondly, it gives the impression that Apple is prepared to take a hit to keep UK customers sweet by maintaining pre-Brexit prices which suggests, true or not, that it doesn’t think European customers are as important.

Those of us outside the UK are surely entitled to wonder how and why Apple keeps UK prices at the same level despite the currency fluctuations. If it’s prepared to accept lower profit margins from UK sales because of the weakness of sterling, why won’t it do the same for countries in the EU like Ireland by reducing their prices in line with the UK’s?

Perhaps Apple will raise its UK prices in the next few weeks because of the post-Brexit decline in sterling, just as other vendors have already done (or announced). If it doesn’t, it may have to revisit its European pricing if it wants to keep prospective customers interested. While the pressure to reduce prices for a small country like Ireland might not be particularly strong on Apple, it could be much harder to ignore in larger countries such as Germany and France.

In the meantime, Irish Apple partners are in danger of losing sales to the vendor’s UK partners because they can sell iMacs at prices 20% lower purely because the vendor hasn’t amended its price levels to take account of sterling’s decline against the euro. Just like Brexit, it doesn’t make sense.

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