Apple's offensive pricing strategy

So, yesterday was MacWorld Keynote day…

Seven days ago, Apple announced an imminent price reduction on the UK iTunes store, for the first time bringing about standardised music pricing throughout Europe. In their press release Apple threatened to reconsider its continuing relationship in the UK with any record label that does not lower its wholesale prices in the UK to the pan-European level within six months. Suddenly it was clear why Apple is unpopular with the record labels. Why only one major label has opened up their DRM free music to Apple. Here was a retailer genuinely working for the good of the British consumer, threatening to reshape the music industry for the benefit of the customer rather than the corporation.

Yesterday Steve Jobs stood on a stage in San Francisco, and announced a slew of cool new products. Time Capsule is a wireless bass station with a built in hard drive, designed for use with Leopard’s rather excellent Time Machine backup utility. This would be great, except that one month ago I bought an Apple wireless bass station with the intention of connecting an external drive for that exact purpose. But it’s OK, because Jobs says that Time Capsule is very aggressively priced as they want people backing up their content. Time Capsule costs $299 for the 500GB version, or $499 for 1TB. Bargain. And not that unfavourable when compared to the price a standalone drive for my existing Airport Extreme base station would have been.

Right now, one dollar equals just shy of 51 pence sterling. That should make the 1TB Time Capsule something in the region of £254. I’d probably lose out considerably ebaying my Airport Extreme so soon after buying it, but it’d be worth it for the hassle free wireless backups. In the UK however, Apple are advertising Time Capsule at £329—the best part of £80 more than it should be.

The same is true of their rather attractive new laptop, the MacBook Air. Steve Jobs advertised it at $1799, or £917. I’d expected a slight UK premium on that, maybe £999. An $1800 dollar laptop really should be sub £1000. Once again however, Apple are selling it at £1,199—over 30% more than in the US.

I guess, when it comes to the price of Apple’s own products, they won’t favour the British consumer until the courts compel them again.