Big Mac with that iMac?

Mac
#1

G’day,

Some of us here like to gripe on and on about the cost of buying these products that Apple keep putting out. I’m one of them.

A while ago I heard about the “Big Mac Index” - basically an economic concept that can be applied to some elements of global economy, wherein the price of a Big Mac is like a constant around the world.

So… I have just taken 5 minutes of my life (perhaps longer) to apply this to several base model Macs, and the results are thus:

1993 - Mac LCIII = 1222 Aussie Big Macs, but only 592 American Big Macs
2004 - eMac = 569 Aussie Big Macs, but only 344 American ones
2016 - iMac 21" = 320 Aussie Big Macs, but only 229 American ones.

The interesting part in all this… essentially the exchange rate has not varied that much - $0.69 to $0.75 across those 3 times. And yet, in 1993 we were paying twice as much for a Mac, but now its down to being a figure much more comparable to the exchange rate.

Of course, that changes nothing in terms of affordability… I looked in JB Hi Fi tonight at a pretty impressive range of current Macs, desktop and laptop, and literally laughed, as I think I only saw 1 item under $2k. There’s no way I’m buying a new Mac any time soon.

Cheers

cosmic

1 Like
#2

For a while there was an iPod index as well, but I am not sure an iPhone index ever got any traction in the pundit class.

Anyway, you forgot to apply tax differences.
The US list prices exclude state and federal taxes, the Australian price includes GST.
Also back in the day Australia (pre GST) had import taxes and tariffs, and WST that were built into the price wholesalers, and thus retailers had to pay, greatly increasing consumer prices, particularly for long supply chain products as those old taxes were built into each margin down the chain. These days the supply chain is orders of magnitude more efficient too.

Back in 1998 I bought a PowerBook G3 “Wall Street” in th US for about AUD$2400 in Oregon where there is no sales tax. The same in Australia would at the time have been about $5700.

Without me actually working it out, these days you will find that once you have removed GST, Australian Apple products would be closer to US prices once you reduce the exchange rate by about ten cents. It might be a bit more these days due to Apple’s recent glacial update cycle on the one hand and fluctuations in the price of coal and iron ore causing increased exchange rate risk for commodity based currencies like the AUD.

Because Apple tends to adjust prices only when new product comes out, profit is more suspectible to exchange rate fluctuations. Apple Australia’s solution (OK Apple Ireland) [edit: seems to be] to drop the exchange rate when calculating the wholesale price to avoid a future loss situation if the AUD should crater. A slower refresh cycle makes apple’s strategy worse, as there are less price adjustment opportunities.

Plus the years of WST, tariffs and import taxes conditioned Australians to paying more than they need to. This overhang persists in the higher end of the car industry for example where the local car industry was artificially protected right up until recent times. The producers of any product will charge as much as the market will accept and their supply will maintain.

#3

And yes, current prices are just too expensive for me to buy a Mac too. We bought our second home windows machine last year (previous was 2008) after thirty years of regular mac buying. There is nothing for me in the current Mac line up, particularly at this prices.

I am upgrading my 2011 iMac and my FiLs 2012 iMac with SSDs and memory rather than buy new ones. My father’s 2013 MBP will have to do for him for a long time, as will our kids’ 2015 MBAs.

But no new macs at these prices.