Macs in the UAE are not necessarily Expensive

[dingdong]

Well I have been thinking about why Macs are so darn expensive over here. This might have been discussed before but maybe this pos can be made into a sticky so that new Mac-ers can read it and see why they SHOULD buy from IMC. No I am not an IMC employee!

First thing is that IMC comes under Apple Europe. It is Apple Europe which is greedy, not IMC. Try having a look at the prices in Europe.

Secondly IMC has to pay for the 5% import tax and shipping (I am not sure about shipping).

Thirdly IMC has to maintain its own stores, employees etc etc.

Now that covers why Macs seem to be expensive over here. And now we will look at the practical part.

It is better to buy from IMC because you will receive local support and there will local warranty that 'Just Works" You wont have to get your Mac delivered from the USA or Canada (those are the countries where Macs are cheap). If not that then you wont have tug a 19.2 kg Mac (Mac Pro). Any problems tht you encounter upon opening the box can be resolved locally. Thre are more advantges but thats not the point of this post.

Now I will list out how much each Mac costs from the USA and Canada (plus 5% import tax) and compare it with the price over here from IMC or whatever store is on AppleIDX.

I will put the price from USA's Apple Store followed by Apple Store Canada's after a slash ' / '. The prices include a 5% import tax. The USA price includes a rough 10% tax and the Canada's price includes 14% tax unless you buy from Alberta (6%) or Prince Edward Island (16%) or some other states (various tax rates). The Canadian dollar exchange rate keeps changing (duh) so maybe if you feel greedy you can buy when the rate is low.It is also possible to buy from Macmall.com where the prices are a bit lower and they dont charge you for tax (you are supposed to claim). I wouldnt cuz I dont want my money to go to Bush in his war against terror ( nice name for some fake Sega games).

Mac Pro:
2.66 Ghz= around AED 10,500/11500 compared to AED 10600 from IMC.
3.0 Ghz= around AED 13,900/15500 compared to AED 15799 from IMC.

iMac:
17" GMA950= around AED 4200/4500 compared to AED 4700 from IMC.
17" X1600= around AED 5050/5575 compared to AED 5800 from IMC.
20" =around AED 6300/7000 compared to AED 6800 from IMC.
24"= around AED 8400/9300 compared to AED 8750 from IMC.

The rest of the Macs are not done properly in the IDX so I couldnt put them up but maybe later on. If you add the discount you get for joining EMUG or whatever then you can see that the cost falls even lower. If you order online and get it shipped with Aramex then it should close the gap further. Overall you have the convenience of dealing locally so that does add up a lot. You wold have to mess around with complex tax evasion systems and risk the loss of convenient warranty by bringing the Mac over here. I you try bringing it with you then you might have to pay for excess baggage.

[Zaid Al Hilali]

Thanks for your advices, surly we know IMC receives their Apple products through Apple Europe, Europe gets them from Apple USA right? So do you say Apple is charging IMC twice?! We at EMUG came to know that Apple Europe is adding handling, and shipping on the tag but not profit.

I for one agree for what you'e said about local dealers, I support local vendors of any products because I know if I support local businesses they in turn will support mine (what goes around comes around) but from my experience with local Apple resellers in the region and car, watches, shoes, you name it dealers their after sale support SUCKS, luckily IMC are trying hard to distance themselves form such reputation.

Dubai and Abu Dhabi Apple stores and their workshops i.e. iStyle, and Protech have been improving their services alot and we EMUG members acknowledge that always in our conversation and meetings we also put forward our concerns as professionals and amature users in our dialogue with IMC.

Yet again it doesn't mean buying a Mac locally is an advantage when it comes to support, I dealt with Al-Mana' (Apple reseller in Qatar) their support are far worse than you can imagine, that many Apple users in Qatar are paying extra for air fares to buy their Macintoshes from Dubai rather than benefiting Al-Mana'.

Since you have pin-pointed where the added costs are coming from, are we going to see these prices slashed if IMC buys directly from Apple USA in future? God willing

[dingdong]

I don think that IMC will buy from Apple USA because as far as I know alost all the UAE's products come from their European distributors or whatvere like video games and stuff. But i really sounds good to go to macmall.com and buy a nice Mac and end up not paying tax and getting back with a Mac way cheaper.

[Magnus]

Thank you for that rather detailed analysis dingdong. If we for sake of argument accept your analysis as correct, what should we, or can we do to alleviate the situation? I think most of us are in agreement that Apple products here are costly and that it hurts sales here. It's hard to argue with many people about buying a Mac when it's expensive, and especially if they've compared prices to the US, for example. I mean Macs have always been more expensive if you just look at sticker price but they're even more so here, which is a problem when talking to potential switchers, I think.

So can anything be done about this situation?

[Pawan]

First thing is that IMC comes under Apple Europe. It is Apple Europe which is greedy, not IMC. Try having a look at the prices in Europe.

Europe prices usually include VAT. Once a machine is exported VAT is refunded, so I do not think that is a cost to be considered.

Secondly IMC has to pay for the 5% import tax and shipping (I am not sure about shipping).

Agreed 5% tax has to be paid and normal shipping charges.

Thirdly IMC has to maintain its own stores, employees etc etc.

Every store has those cost which are covered even by selling on the MSRP. I don't see why IMC is an exception.

Now that covers why Macs seem to be expensive over here. And now we will look at the practical part.

It is better to buy from IMC because you will receive local support and there will local warranty that 'Just Works" You wont have to get your Mac delivered from the USA or Canada (those are the countries where Macs are cheap). If not that then you wont have tug a 19.2 kg Mac (Mac Pro). Any problems tht you encounter upon opening the box can be resolved locally. Thre are more advantges but thats not the point of this post.

I don't agree with receiving any better support if purchased locally. I have had a friend who had an issue out of the box and the machine was not replaced instead fixed and he had to wait for 10 days. I'm not sure but I think I read about an incident on the forum as well about a member who bought a macbook and had some issues with dead pixels and it yet took him more then a week to get it replaced. So I don't see any point how buying from them helps more.

Now I will list out how much each Mac costs from the USA and Canada (plus 5% import tax) and compare it with the price over here from IMC or whatever store is on AppleIDX.

Do you think even if IMC buys from Apple Europe, Apple Europe pays Apple US TAX? No they don't. When resellers like macmall.com can sell out stuff at lower prices then the apple US store itself without tax, it just proves Apple Europe pays atleast a few hundred dollars less then the MSRP and no Tax. I don't see any point in adding shipping costs here because even if orders are placed by Apple Europe, the goods are usually shipped from China. Shipping from China to US or UK would be about the same. So I expect landed costs of an Apple computer in UK to be approximately the same as the landed cost in US.

I'd not like to make a lot of calculations, but a simple one from my experience. This is an example for only 1 piece if you import it your self. For eg the standard entry level macbook pro costs $1999 on the US website. You could probably get it from macmall at $1999 shipped without any tax = Dhs. 7340 + 200 for shipping it to Dubai and an approx 450 for taxes = ~ Dhs. 8000. I personally know stores in HK and US who would sell you the same entry level macbook pro for ~ $1800/$1900. My assumption is IMC would be paying way lower then this because if a reseller sells 1 unit at this price and yet makes profit and covers all his costs, IMC would be stupid to pay any higher.

Now if you want to re-do all the calculations and see how high a price we are paying or how much profit is IMC making

To make a comparison, Hong Kong also imports apple products (which means they pay for shipping). I do not know how much tax they pay, but what I'm trying to get at is if HK can import and sell an apple product below the mentioned price on the apple US website (without tax) why can't at least Dubai sell the same product at say the US MSRP or a little higher? Why is there such a big difference??

[ny]

I dont think IMC is allowed to purchase from a US reseller and in turn sell those in the UAE ( I realise that that is not what is implied by Pawan, but just saying that IMC might not be procuring/ or allowed to procure at the same prices as US resellers). It is simply that companies price products differently for different markets. Take for instance DVDs and Games (which are region coded to prohibit exports to other regions), they are a lot cheaper in the US and Japan than in the rest of the world. It all depends on how competitive the market is. Automobiles are also priced different in different markets.

Apple (or Apple Europe) is not stupid to let IMC rake in too much of extra margins. I believe that Apple Europe charges high prices to IMC. Why ? Because they can. Would it not hurt sales then. For smaller markets, once you cross the threshold, it is no longer price elastic. Meaning, if a buyer can afford to pay US$ 2000 for a computer in a country like India, he will just as well pay US$ 2400 because he has the purchasing power, whereas the rest of his countrymen will only buy computers less than US$ 700. In such a scenario, will dropping the price to US$ 2000 (same as US pricing) increase sales ?, highly unlikely.

I dont know if similar logic works for explaining higher prices for other regions like Europe and Middle East. I dont think IMC will realise more computer sales, if it maintained the pricing similar to US prices. Also, Apple has to earmark some money for market development expenses. Being smaller markets, Middle East and Asian countries pay higher prices to cover for market development. So, what happens to the consumers. Well, some try to get grey imports and the rest grudgingly buy from the local distributor.

But in the USA, where the market is extremely price sensitive, Apple can not afford to charge twice as much as other vendors. They still try to manage premium pricing, but while maitaining a delicate balance.

In Summary, I dont think IMC is to be blamed for high prices.

[Mushroom]

"Expensive" is a relative term... Things cannot just "be" expensive. They are expensive comparing to their own prices in different places or comparing to their substitutes. So what prices are you comparing local prices to justify calling them expensive.

[Avant]

Regarding the support issue, there is no difference where you buy your apple product. The Apple Macs have a 1 year international warranty. If you have ever taken a Mac for support in the UAE, the first thing they ask you is for the warranty status, which is taken without regard to where the unit was purchased.

Second, Macs are not manufactured in the US, so I don't understand why people refer to IMC having to import them from the US. the computers and other Apple products are manufactured in China and exported to their various markets worldwide. If anything, we can argue that shipping to the UAE is less costly than shipping to Europe and North America.

Third, the after-sales service in the UAE is not spectacular. It may not be poor, and yes, it has improved, but we don't have "Genius bars" and telephone Apple Care support as they do in North America.

So what am I paying for in premium? To feel sorry for the distributor because he has to "import the Macs from Europe" is ridiculous because he does not buy the product at retail and sell them for retail plus margin. The middle east distributor needs to strike good purchasing deals from Apple, and can easily make the case for lower prices in order to move more product.

I am certain that with US/Canada prices, we would have a huge number of extra macs on the market in the GCC and Mena region.

I bought several Macs over the years from Apple and had them freight-forwarded to me in the UAE. After paying for the shipping and customs, I still saved thousands of dirhams on each unit. Not to mention that I built-to order my units, for example, with faster hard drives (7200rpm). When I asked UAE retailers about custom options, they stared at me blankly and said "maybe" and that it would take a few extra months and the cost went up exponentially. Other retailers said it was not possible.

Sorry, but this is horrible treatment for our market. Anyone who promotes the idea of paying the GCC premium for Macs is not making sense. We don't have to, and I will continue to purchase Macs from the USA directly.

Avant

[Mushroom]

Not to mention that I built-to order my units, for example, with faster hard drives (7200rpm).

If you are buying hard drives direct from Apple, you should not be concerned about pricing in general. Contradiction in the making...

[Avant]

If you are buying hard drives direct from Apple, you should not be concerned about pricing in general. Contradiction in the making...

What are you talking about? I meant that I can easily (with the click of a mouse) select an option for a 7200rpm hard drive rather than the stock 5400rpm drive on a macbookpro when ordering from the US. I said that doing this in the UAE is tantamount to a huge effort and huge expense, if at all possible. On Apple's website its only a $50 option.

How am I contradicting myself Mr. Mushroom?