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Apple's (Nasdaq: AAPL) iPad will be making its global debut at the end of this month, launching in nine markets outside the U.S., including Australia, Japan, Spain and the UK. However, there's already some grumbling among prospective customers in some of those regions, who are displeased by the disparities in pricing.
With few exceptions, the iPad will cost more in markets outside the U.S. -- but why?
Apple CEO Steve Jobs sent an email response to one complaining customer 
in the UK,
9to5mac reported, saying, "please educate yourself. UK prices must by law include VAT [Value Added Tax], which is around 18 percent. U.S. prices do not include tax."
Global Trade Pricing Intricacies
Though he may have come off sounding grumpy, Jobs made a valid point.
"Anytime a company exports or sells a product in international markets, the price will to a large degree depend on such costs as taxes, transportation, local manufacturing or supply chain costs," Charles King, principal analyst with Pund-IT, told MacNewsWorld.
For a company like Apple, whose pricing is very transparent due to its products' popularity, navigating such factors can be a like picking through a minefield, said King. "Clearly, the vendor doesn't want to alienate its customers or the tax authorities, but it can't always satisfy them both."
This is not an apples-to-oranges comparison exercise, Azita Arvani of the Arvani Group told MacNewsWorld.
Currency fluctuations are a factor, she pointed out. "Especially with the euro going down against the dollar recently, the American goods will look more expensive to European buyers."
The cost of doing business in each country -- including running the business, distribution and localization -- varies depending on the local business and employment laws, she said.
Still, even after adjusting for the various taxes levied, it is clear that Apple has priced its products differently in many markets in Europe -- according to a chart put together by the Italian tech blog SetteB.it, and reproduced in other publications, including Wired.
SetteB.it converted all the prices into euros for standardization and included local taxes such as the UK's 17.5 percent VAT and U.S. sales taxes.
The cheapest iPad that can be had in the U.S. goes for US$545 including sales tax (equivalent to 428 euros). The price of Canada's cheapest iPad equates to 469 euros; in the UK and Australia, the lowest-priced iPads prices would convert to 505 euros and 444 euros, respectively.
There are similar discrepancies on the high end as well. The priciest U.S. Ipad, at $905, would be equivalent to 711 euros. In the UK, the top-of-the-line iPad would sell for 823 euros.
Not all iPad prices in other countries are higher than in the U.S. iPad prices in Japan, for example, are cheaper, equating to 418 euros on the low end and 700 euros on the high end.
There are also variations in pricing for 3G data plans from one carrier to the next.
'An Art Form'
Pricing is an art form, said Greg Sterling, principal of Sterling Market Intelligence.
"A lot of the time, companies will price a product depending on what it believes the market will bear, and not just on the fixed price plus a margin," he explained.
Whether that is what Apple has done is a matter of speculation, he told MacNewsWorld, noting that it would be, if nothing else, "naive" for Apple to think it could get away with setting a higher base in some markets without a protest from local consumers.
"Then again, maybe it thinks because the iPad has proven to be so popular, it can price it higher in other markets," said Sterling.
