[masklinn]

Yep, and that’s always been an issue with Apple products: they set their prices in USD, then set the foreign price using conversions from around release date (plus taxes obviously).

That means if the dollar was very strong at release, the machines get very expensive in foreign currency.

[ralfn]

Which is weird, because barely any part of it is produced in the US. So it's not that their costs are going up.

They are just not realizing they are self sabotaging in terms of opportunity costs.

If they adjust prices to purchasing power, with at least 30% profit marge, windows laptops and chromebooks would be having crisis talks right about now.

People would prefer the Apple stuff, but not at that price. Even if you can easily afford it, if you are from a protestant nation, you couldn't live with yourself spending your money so irresponsibly. The value deal isn't there, unless you are using it professionally. But for leisure? No way.

[jsnell]

> Which is weird, because barely any part of it is produced in the US. So it's not that their costs are going up.

It seems pretty likely that most of their supply contracts are using USD as the currency, even if the production is not happening in the US.

[ksec]

Which is the part most people here on HN still somehow dont understand, the world, tech and especially SemiCon are running on USD. Patents are in USD, All your TSMC Wafers are in USDs, and they goes along with most of the stuff produced by TSMC from the likes of Qualcomm. Majority of Design and Software are in USD.

[simonh]

This isn't the first time Apple sales have taken a hit in a downturn. The issue is if they significantly cut margins now, when the economy swings back up again the risk is they'll face an uphill battle growing margins again.

People delaying purchases, or buying lower spec models or alternatives now may well want to upgrade sooner when their financial situation improves. If Apple sacrifices margins they risk losing out on those high margin sales return in a few years time. In the long term it may be better to take the temporary hit to revenue now in order to preserve their margin structure long term.

What they might do is introduce down market models, or more likely keep older models around in the lineup longer than they otherwise would at a slightly reduced price. That would still mean taking a hit on sales at the top end, as here with M2.

[viraptor]

> If Apple sacrifices margins they risk losing out on those high margin sales return in a few years time.

Changing the official price is not the only way to go. Apple is one of very few places which doesn't regularly run sales and promotions to adjust the sales of their products. They could easily run an Easter sale that takes a month, then something else again. This wouldn't change their margins long term.

[mywittyname]

Apple is using the Porsche model of, "An entry level <Porsche|Apple> is a used one".

[rmah]

Apple is the only major consumer electronics manufacturer with high enough margins to cut them "significantly". IIRC, their gross margins are still multiple times higher than the industry average. They would have to cut prices by a lot more to fall in line with industry averages, which honestly, doesn't seem likely to me.

[hbn]

If some countries were selling Apple products at a cheaper USD conversion than what it costs in the US, you know there would be massive reselling from those countries if you could undercut Apple's own prices on brand new products.

[bananapub]

why is it weird?

Apple states its quarterly results in USD, which is all their investors/media care about, so of course Apple cares enormously about profit/revenue in USD. in addition, much of their design/engineering/management/etc costs are in or coupled to USD.

[ralfn]

It makes sense from a tactical point of view. But with the M-line of architecture they had the strategic opportunity to burn the competition.

[danaris]

Like so many before you, you are making the mistake of thinking Apple cares about marketshare.

They quite demonstrably don't. They care about profit-share, and about making what they see as the best computers they can.

As others note, Apple already takes either a plurality or a majority of the profit in computer sales. What incentive is there for them to reduce their average margins, take on a lot more support responsibility, and have to ramp up production significantly, just to capture a notoriously fickle and unrewarding segment of the market?

[ksec]

I actually thinks Steve would actually lower the price of iPhone and Mac given how profitable they are now and how much cash they have. Instead of Doing Shares Buy Backs.

>What ruined Apple was not growth … They got very greedy … Instead of following the original trajectory of the original vision, which was to make the thing an appliance and get this out there to as many people as possible … they went for profits. They made outlandish profits for about four years. What this cost them was their future. What they should have been doing is making rational profits and going for market share.”

Just look at the BOM cost of MacBook Air and an iPad Pro. There is not reason why MacBook Air cant be $799.

[scarface74]

What competition? Just like with phones, Apple is already getting most of the profit from computers. The commodity PC market is not exactly one worth going after.

[estebank]

If they were to price the M1 line "to sell" when they publish the M3 line, they could still do so.

[unethical_ban]

They probably don't want the grey market to flourish, where Indian MacBooks sell for $700 locally and get shipped to the US in an eBay transaction. Geo-locking a laptop in the modern world is impractical if not impossible and would have its own PR issues.

There can't be a grey market if you charge the same price globally.

[midoridensha]

I think geo-locking is definitely a workable solution. Add a cheap GPS receiver and the machine can tell where it's located. Then if it's moved between countries, it can refuse to work until the user pays up. Since Apple controls the OS, they can bake this in: bring up a web browser page pointed to a payment form, linked to their Apple account.

I don't see why this wouldn't work. It's not like Apple users are going to rebel and refuse to buy Apple products because of something like this.

[dukeyukey]

Produced, no, but designed, programmed, and marketed, yes. And Apple's profits compete with other US companies, so it's products need to be profitable at the current very strong US dollar valuation.

[fourseventy]

They are a trillion dollar company. I think they have their pricing and profit margins well in hand.

[pier25]

Plus some other stuff.

Here in Mexico Apple products are around 20-25% more expensive than in the US which is way higher than simply adding the 16% VAT.

Not only that, in the US it's common to have Apple sales in multiple retailers like BH etc. These are almost non existent here in Mexico. The best we get is some meager discount at Costco for the models nobody wants.

[JCharante]

What is a good alternative? Should it be indexed off the price of gold?

[masklinn]

Most companies will set local prices based on local markets, and will react to changes in economics by adjusting prices.

[cnity]

With a company as large as Apple, and a product with such high volumes, wouldn't this simply present arbitrage opportunities which would smooth out the costs again anyway?