The Isaac Newton Paradox - Falling Pound, Rising Apples

Posted by Paul Anderson Riley in Personal Finance on 31 October 2016 - Paul is a Credit Analyst at checkmyfile

Are alternatives to Apple laptops and desktops about to see a rise in popularity? This could be possible with Apple revealing that products will now be more expensive for UK consumers to buy.

Although some think that Apple products are already expensive enough as it is, the UK will now have to spend even more money to acquire a product from the fashionable range of Apple laptops and desktops, as the company increases prices by hundreds of pounds. At the unveiling of the new MacBook Pro Laptop it was announced that UK consumers will see prices that are now more in line with US costs, after VAT and currency conversions have been considered. Old ranges of the Apple laptop and desktop products will also see a price rise, with consumers having to pay hundreds of pounds more to obtain a Mac Pro in the UK.

Patrick O’Brien of Verdict Retail Consultancy predicts further prices rises and says, "Apple has to recalibrate prices after significant currency fluctuations, and since the EU referendum, UK prices are out of sync with the dollar… Apple has taken the hit up until now. While price increases won't look good to the consumer, it's difficult to blame Apple…Once you strip out UK sales tax (VAT) and the currency conversion, the new UK prices could still be viewed as fair."

The cheapest Apple laptop is the Macbook Air (13in) and this has gone from £849 in March 2015 to the current price of £949. The desktop Mac Pro was £2499 in December 2013 and will now cost you £2999.

Apple are not the only company amending prices in line with changing currency, many other technological companies have increased product prices. Some businesses services offered by industry competitor Microsoft will also see costs increased as a result of the pound’s falling value against the Euro. An announcement explains that some service prices will be increasing by 22% in 2017.

Microsoft says "We periodically assess the impact of local pricing of our products and services to ensure there is reasonable alignment across the region and this change is an outcome of this assessment."

Moving forward, as we are regularly reminded of the falling pound but the better performing economy, we will soon see how this impacts on us as consumers. Will the increased price of branded goods from outside the UK make us become savvier when shopping and less materialistic? Time will tell.

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